Who said the November 2016 economic statistics roundup would only bear bad news” Instead, we start it off with a little cheer. WBS has suggested GDP growth would likely be between two and three per cent in 2017. This is in contrast to the pessimistic forecasts made by the Office for Budget Responsibility (OBR) and Bank of England the former said ?any likely Brexit outcome would lead to lower trade flowsAnd lower investment than the UK would otherwise have seen.
There isA 75 per cent chance that growth in 2017 will exceed the OBR’s expectations, WBS claimed this could change from 2018 onwards though. Ana Galvao of the Economic Modelling and Forecasting Group at WBS, said: “The WBS forecasts are produced under the assumption that historical relationships and patterns in macro-economic data continue to hold post-Brexit. They may well break down. But while a change for the worse in terms of future economic growth may happen, there is no indication that this will happen in 2017.
It makes sense then, that 74 per cent of UK firms are brushing off the Brexit vote. The shock of the referendum result was much briefer than expected, and as such many companies adopted a business as usual approach. After all, Britain is still technically part of the EU, which may be one of the reasons WBS believes 2017 will not yet feel the aftermath.
When we find out what Brexit actually means, there’s no doubt things?will begin to change. For the November 2016 economic statistics piece,?Andrew Tate, president of R3, told Real Business:?”In the short-term at least, there are likely to be one or two instances of Brexit being used as a convenient excuse by companies which run into trouble.
“That being said, Brexit will cause genuine problems for a significant minority of companies. The main reason for this is the sharp fall in the value of the pound. And uncertainty over the future of the UK-EU relationship may put some important deals on hold, at least temporarily. Some of our members have reported an increase in calls from worried business owners looking for advice. While a number of recent surveys have reported business confidence falling since the vote, that doesn’t appear to have yet translated into a financial impact for most.”
This doesn’t mean it’s smooth sailing for the UK though, as our November 2016 economic statistics brought to light the fact that SMEs are poorly cushioned against the ‘shocks” of uncertain times.
Essentially, 4.2m of the nation’s 5.5m businesses have no employees and run entirely on the efforts of one person. This was according to AXA, which said incidents such as illness could spell closure and a rapid fall in income. The firm’s survey highlighted that”few feel confident enough to put money aside for hard times. The average business could only keep going for three months on current funds, and one in ten claimed resources would not stretch to the next month.
When the consequences of Brexit truly hit the UK, the firms most prepared will keep floating above water.
Read on to find out how the dread skills gap is looming its ugly head once more.
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The November 2016 economic statistics?roundupAlso found one other major problem. We ve all talked about Britain’s lack of skills, and it’s a subject that was hammered home after research from the Chartered Institute of Management Accountants (CIMA) was unveiled. It found 82 per cent of school leavers required significant training and that the low caliber of new hires had started affecting the performance of businesses.
Noel Tagoe, executive vice president of academics at CIMA, said: The lack of workplace preparation is undermining business performance, and limiting the potential of young people. Children spend over a decade at school and should expect to emerge with the functional numeracy and literacy skills on which to base a career. At a time of political and economic instability, this causes even more concern. If the UK is going to continue to prosper as a service economy we must maintain our skills base, and this means making sure our education system is fit for purpose.
If the above revelation didn’t convince you the topic of skills was of great importance, then you haven’t heard the latest news from Albion Ventures. In our November 2016 economic statistics”feature, we share its latest claim that it is the first time SMEs identified a shortage of skilled staff as the biggest obstacle to growth. It came ahead of red tape and regulation, which ranked in second and third place respectively in terms of corporate challenges. Political uncertainty and leaving the EU were ranked in fourth and sixth place.
This, Albion Ventures’said, comes at a time when 50 per cent of bosses with over five employees plan to grow their firm’s headcount. The lack of skills was most acute among London-based firms, followed by those in the South East and the North West. On a sector basis SMEs in the manufacturing industry reported the highest level of concern, followed by those in the technology and telecoms sector and construction businesses in third place.
That aside, the UK needs to?boost the employability of young people to improve economic growth. It was a topic heavily focussed on by the Open University. It cited figures from thee ONS on young people not in education, employment or training (NEETs), showing an increase of 14,000 between April and June to hit 857,000 young people. If the UK could match Germany’s rate of 10.1 per cent, the country could reap a £45bn economic bonus, the Open University claimed.
“The UK has long suffered from the so called productivity puzzle, which sees us lag behind our G7 counterparts in terms of output per worker,” explained Steve Hill, external engagement director at The Open University. “The NEETs problem is another facet of the fact that the skills needs of businesses up and down the country are not being met, and is of course a tragedy for a generation of young people as well.
He further added to the November 2016 economic statistics: “The potential for a £45bn boost to GDP if we can match Germany’s youth employment record should make us consider what it is that Germany is doing so well. The attitude towards vocational training is one of the biggest things which sets them apart.”
