|In Q3 2017, the productivity of British workers increased at its fastest rate for six years, up 0.9% on the previous quarter. Given its long-term stasis, it is unclear whether this is the start of a more positive trend or a short-term blip, and begs the question what happens if or when the nearly consistent decrease in joblessness in Britain stops.
Complicating the issue further, research from ComRes indicates that this overall rise in employment masks problems within specific sectors. ComRes has helped the Recruitment and Employment Confederation (REC) JobsOutlook since April 2016 track the issues around recruiting into specific roles. For the fourth month in a row, to December 2017, health and social care is the job area around which employers expect to see the biggest shortage of candidates for permanent roles.
Although it seems longer, it was just eight months ago that social care caused such a rumpus when the Conservatives launched their 2017 Manifesto. Despite protestations that ‘nothing has changed’, social care was this week added to the Health Secretary’s job title though already a part of his remit, potentially a sign of the significance this will hold for the PM. Solving the problem of a lack of job candidates, especially when Brexit risks deterring EU nationals from staying in the UK or migrating here for jobs, will doubtless be one of Mr Hunt’s early priorities.
This issue of employment and (perhaps more importantly) skills is further highlighted by the latest ComRes research for London Chamber of Commerce and Industry (LCCI). The Capital 500 survey, the largest and most authoritative test of business sentiment in the capital, paints a depressingly gloomy picture with businesses more pessimistic about London’s prospects than at any time since we began the series at the start of 2016.
Despite this pessimism, more firms still expect to recruit new staff over the next three months than say they do not, and around six in ten who have recruited in the past three months have had difficulty doing so. Alarmingly, given near-full employment and the corresponding challenges in recruiting staff, investment in training is static – suggesting many firms still adopt a short term attitude to nurturing talent despite myriad efforts to encourage the acquisition of new workforce skills.
Growth relies on the consistent ability to expand output, but an economy will struggle to achieve that if productivity remains low, businesses cannot recruit people with the skills they need and potential talent from the Continent feels diffident about their long term status in the UK.
There are however signs of hope. There is greater clarity on the status of EU nationals this side of Christmas, productivity may finally be on the rise, the FTSE 100 Index is at its highest ever, the Government is finally finding the bandwidth to focus on pressing domestic issues and - tempting fate - 2018 looks likely to be more stable politically than any year since 2014. And, if none of that makes you feel any better, then remember the Spring Equinox is in just 67 days’ time.