The largest independent survey of North East businesses has revealed record level concerns about skilled shortages and staff costs.
Organised by North East England Chamber of Commerce, the Quarterly Economic Survey for Q4 2018 showed the tightness in the regional labour market. Workforce growth has slowed significantly from this time last year, while price pressures arising from pay settlements continue to grow. More than 50% of respondents said concerns about staff costs were higher than three months ago; the highest level in over a decade.
The results also revealed that despite these concerns confidence among businesses has improved from the previous quarter.
John McCabe, Chamber President and MD, Fusion PR Creative said: “Our latest survey results provide some welcome relief from the worrying data we saw throughout the first three quarters of 2018, with business performance and confidence improving somewhat towards the end of the year.
“Growth in domestic sales and a rebound in exports are the main contributors to this, with scores for both indicators well ahead of where they were three months ago.
“However, there are interesting details and discrepancies behind these headlines. Our service sector exporters have fared better than manufacturers, while growth in workforce has fallen back from what we were seeing this time last year.”
The improvement in survey scores for Q4 2018 from the previous quarter are led by an increase in both UK sales (+14.7%) and export sales (+22.9%). However both of these indicators were subdued in Q3.
While scores for investment remain in positive territory, the results for spending on both plant and training are flat and are much lower than this time last year.
The results do show businesses seem to be spending time and resources on getting their strategies for development right, with improvements in this area cited as the biggest factors contributing to success.
On the downside, uncertainties and concerns surrounding Brexit, chiefly expressed in terms of future market conditions, demand shocks and increased costs are dampening many businesses’ confidence.