Business News Round Up (17/10/2023)
Wages overtake inflation for first time in nearly two years
Average pay growth rose above inflation for the first time in almost two years, in a sign that the squeeze on living costs may be starting to ease. Wages rose at an annual rate of 7.8% between June and August, figures show. That was higher than average inflation over the same three months, which measures the rate at which prices rise. Revised figures showed pay overtook inflation in the three months to July, meaning wages are outpacing prices for the first time since October 2021. However, the rise in wages is an average and does not mean that cost of living pressures are subsiding for everyone. There continues to be a big gap between public and private sector pay. Wage growth for public sector workers reached 6.8% between June and August, which the Office for National Statistics (ONS) said was the biggest increase since comparable records began in 2001. But the average pay rises for private sector employees was 8%. People employed in finance and business services saw the largest rise in annual pay, followed by those in the manufacturing sector. The rate of inflation has been slowing but, at 6.7% for the year to August, it remains more than three times higher than the Bank of England’s 2% target. New inflation figures will be released on Wednesday which are expected to show price rises are continuing to slow.
https://www.bbc.co.uk/news/business-67121459
Climate tech investment falls by 40% amid economic uncertainty – report
Investment in climate technology has fallen by 40% in the last year, according to a report from PwC. The financial services giant’s State of Climate Tech report for 2023 analysed more than 8,000 climate tech start-ups and more than 32,000 deals worth more than £400 billion. The report said that the decrease in investment reflects market conditions more than a deliberate move away from climate tech. It comes as economic uncertainty and geopolitical conflict dent investor confidence. PwC also found that the fall in climate tech investment was significantly smaller than the venture capital and private equity average of 50% across sectors. Instead, the share of funding going to climate tech continued to rise, accounting for more than 10% of private market start-up investments in 2023. Emma Cox, global climate leader at PwC UK, said: “The development and scale-up of climate technology is an essential part of meeting the climate challenge. So, while it is not surprising that absolute levels of investment in climate tech have fallen along with the market, it is concerning. The good news is that the sector has performed well in relative terms, with investment falling less than in other areas. It is also encouraging to see a shift in the balance of investments towards technologies that can cut emissions the most. Now we need to see that shift continue, coupled with an increase in the absolute levels of investment in all technologies with the potential to cut emissions.”
https://www.insider.co.uk/news/climate-tech-investment-falls-40-31202710
Businesses turn to automation amid hiring struggles
Labour shortages continue to have a material impact on firms, 12% saying they shrank in the last year as they were unable to make the most of new demand from customers. A new study has found that the majority of firms are now trying to offset staff shortages by up-skilling pre-existing staff, while almost two thirds are investing in automation to reduce reliance on labour. Since the Covid-19 pandemic took hold in 2020, millions of workers have left their jobs. The so-called Great Resignation represents a previously unprecedented event in the labour market, as following two years of home-working and public health measures amid the global pandemic, many people have re-evaluated what they expect from employers. While the trend seems to have momentarily slowed, economists and business leaders continue to cite it as a factor which is stifling growth in the UK. According to a new study from the CBI and Pertemps Network Group, labour shortages are still having a material impact on firms’ ability to invest, respond to demand and grow. In the last year, 38% of firms told researchers from the business organisation that they were unable to grow to meet new demand due to staff shortages. Conducted in August and September 2023, the Employment Trends Survey took opinions from 263 businesses of all sizes and sectors across the UK. The survey found that a further 22% had held back on investments to expand, due to unfilled roles, while 12% had actually seen their business shrink.
https://www.consultancy.uk/news/35618/businesses-turn-to-automation-amid-hiring-struggles
New HyNet partnership aiming to tackle green skills gap
Industrial decarbonisation project HyNet has partnered with a local talent development initiative to address the region’s green skills gap. A 2020 report by the National Grid found the UK energy sector needs to fill 400,000 roles by 2050 to meet current net zero targets. This includes more than 60,000 jobs in the North West of England, where HyNet located. The HyNet cluster project aims to transform industry in the region by replacing fossil fuel gas with low carbon hydrogen and carbon capture and storage from 2025. Progressive Energy, the architect and coordinating partner of HyNet, has partnered with Agent Academy to investigate ways to get more young people interested in green energy careers. The partnership will see young people undertake a real-world marketing and communications challenge centred on HyNet. Participants will conduct extensive research and engagement to propose recommendations to help attract prospective talent to emerging roles within HyNet and the wider net zero economy.