Professional services skills shortage worst since records began - BCC

Skills shortages in the UK workforce are reaching critical levels with professional services the worst affected, according to the British Chambers of Commerce’s (BCC) latest Quarterly Economic Survey.

The BCC’s poll of over 7,000 businesses, which it describes as “the UK’s largest and most authoritative private-sector business survey”, found that of service sector firms hiring, the percentage reporting recruitment difficulties had risen to 71 per cent, the highest since records began.

In manufacturing, the percentage of recruiting firms reporting difficulties is at its highest since Q4 2016.

In the manufacturing sector, the proportion of firms reporting improved export sales and orders fell slightly compared to the previous quarter.

The indicators for domestic sales, employment expectations, recruitment, and confidence in turnover are also lower than in the previous quarter.

In the service sector, a key driver of the UK economy, growth remains muted and relatively unchanged from the previous three months, and is below historic averages. The proportion of firms confident that turnover and profitability will improve in the next year decreased, and firms reporting improved cashflow remains low.

Both sectors have seen considerable rises in the proportion of businesses expecting prices to increase in the next three months.

In the services sector, the percentage balance of firms expecting their prices to rise jumped to +36 per cent, the highest since Q3 2008.

In the manufacturing sector, the percentage balance of firms expecting their prices to rise increased from +35 per cent to +50 per cent, the highest since Q4 2016.

Dr Adam Marshall, director general of the BCC, said: “While there are many business bright spots across the UK, the evidence from the biggest private business survey in the country shows that growth and confidence remain subdued overall as we enter a new year.

“Labour and skills shortages are set to be the biggest potential drag anchor on business in 2018, since ultimately it is people that make businesses work.

“Business itself must do more, by training and investing wherever possible in people, but Government must also give firms the confidence to put their livelihoods on the line and go for growth.

“This must be the year employers act rather than just complain on skills, and the year Government delivers clarity, leadership and investment in people and infrastructure. Kick-starting growth, and boosting wages and prosperity for all, depends on this.”