Rising wages add more pressures for businesses

MIDLAND bosses have warned that high employment rates and rising wage growth are fuelling recruitment difficulties and cost pressures for firms.

The West Midlands employment rate rose by 0.5 per cent between April and June compared with the previous quarter, according to official figures this week.

In the same period, unemployment fell by 0.5 per cent, the secondbiggest decrease experienced by any region in the same period.

The West Midlands experienced one of the biggest increases in employment rate seen across the UK, following bigger increases

recorded in the South West and Northern Ireland of 0.9 per cent.

Additionally, estimated annual growth in average weekly earnings, excluding bonuses, also grew by 3.9 per cent.

After adjusting for inflation, regular pay is estimated to have increased by 1.9 per cent compared to last year’s figures.

Although this regional increase in employment figures was welcomed, Greater Birmingham Chambers of Commerce (GBCC) said high national employment and wage growth is putting more pressure on local firms with Brexit looming.

Paul Faulkner, chief executive of GBCC, said: “It is encouraging to see the regional labour market picking up over the most recent three months, with a 0.5 per cent increase in employment figures.

“However, with high national employment businesses are facing recruitment difficulties, and sustained increases in wage growth are contributing to increasing cost pressures for local firms.

“Our latest Quarterly Business Report showed that of the 58 per cent of firms in Greater Birmingham attempting to recruit in Q2 of this year, 55 per cent faced recruitment difficulties.

“Uncertainty over the future of immigration post-Brexit – recently renewed by the change in Prime Minister – is furthering these recruitment difficulties and threatening the talent pipelines of many local organisations, large and small.

“Last week’s announcements in regards to immigration rules concerning scientists will only alleviate concerns for a small fraction of these businesses.

“While we are continuing to lobby against a chaotic no-deal Brexit, we are also working hard to help businesses prepare for any scenario.”

The Chamber has launched a free Business Brexit Health Check with the West Midlands Combined Authority.

It offers businesses a bespoke report on how Brexit might impact them and what they can do about it.

■ For details go to www.wmca.org.uk/BrexitHealthCheck