Reacting to the latest labour market data from the ONS, Patrick Milnes, Head of People and Work Policy at the British Chambers of Commerce, said:
“There are strong signs that the labour market is continuing to loosen as wage growth including bonuses has eased to 4.2% and the rate of unemployment has risen to 5.2%.
“Wage growth is being propped up by the public sector and the number of unemployed people per vacancy now sits at 2.6, the highest in more than 10 years if the pandemic period is excluded.
“Last year, businesses were hit hard by the increase in National Insurance contributions, and many are now facing further rises in the National Living Wage alongside higher business rates. Our research shows that labour costs remain the biggest cost pressure for businesses, cited by 72% of businesses.
“Against this background it is unsurprising they are holding off hiring. Especially as the imminent introduction of new Employment Rights legislation adds additional complexity to the picture.
“While the Spring Statement will provide a fuller update on the economic outlook, businesses are clear they want to see concrete action to reduce costs, boost exports and encourage investment.”
Ross McNally, Chief Executive and Executive Chair of Hampshire Chamber of Commerce said:
“It is a disgrace, but perhaps not a surprise, that unemployment among young people aged between 16 and 24 is now the highest it has been in more than ten years.
“We are at risk of seeing a lost generation, and the government must do all it can to enable employers to hire young people, whether straight into work or through apprenticeships.
“There should be more incentives through the business tax system to encourage employers here in Hampshire and across the country to consider taking on more young people.
“Investment isn’t just about plant and machinery – it’s about people and their future. The government needs to do much more to help small firms offset the rising costs of doing business.
“Businesses were hit hard by the increase in employer National Insurance contributions, and many are now facing further rises in the National Living Wage alongside higher business rates.
“Labour costs are the biggest cost pressure for businesses, cited by 72% of respondents in latest chamber of commerce research.
“Against this background it is unsurprising they are holding off hiring. Especially as the imminent introduction of new Employment Rights legislation adds additional complexity to the picture.
“While the forthcoming Spring Statement (3rd March) will provide a fuller update on the economic outlook, businesses are clear they want to see concrete action right now to reduce costs and help them survive and invest in creating jobs.”
More detail on the labour market data can be found here.
About Hampshire Chamber of Commerce
Hampshire Chamber of Commerce is the independent voice of local business across the county and one of the largest regional business networks in the UK. With a strategic vision to ‘unlock Hampshire’s potential’, Hampshire Chamber brings together the combined influence, strength and expertise of the county’s three former major chambers. It works with over 2,000 individual firms spanning all sectors and sizes of business. Member services include training, advice, international trade documentation, events, networking opportunities and lobbying to policymakers on issues affecting business. Hampshire Chamber’s business network is designed to help any employer to grow and thrive irrespective of their stage on the enterprise journey.
About the BCC Insights Unit
The BCC Insights Unit brings together all the strands of research the BCC undertakes, including the Quarterly Economic Survey, the largest private sector business survey in the UK; the Quarterly Economic Forecast, currently ranked by the Sunday Times as the country’s second most accurate; and a leading programme of business surveys which inform the national economic debate. The Insights Unit was launched on 3 July 2023.