Businesses concerned by employment cost pressures - Chamber

Increased employment costs will put more pressure businesses who are already struggling to recruit staff, business leaders warned today.

Labour market statistics released this morning reveal the West Midlands unemployment rate fell by 0.4 per cent in the last quarter (July to September 2024), while employment increased by 0.4 per cent.

However, according to the Office for National Statistics (ONS), the year-on-year trend is less positive, with unemployment up by 0.8 per cent and employment fall by 0.9 per cent.

The region’s economic activity rate also remains “stubbornly high” at 22.5 per cent.

Greater Birmingham Chambers of Commerce said that while businesses continue to face labour market challenges, they are also concerned by increases to National Insurance contributions and the National Living Wage which were announced in the Chancellor’s Budget.

Emily Stubbs (pictured), head of policy at Greater Birmingham Chambers of Commerce, said: “The ONS continue to flag concerns about the reliability of regional labour market statistics, but the small increase in regional employment since April to June, and decreases in unemployment and economic inactivity are encouraging to see.

“Nevertheless, today’s figures reflect a less positive trend over the year for the West Midlands labour market.

“Regional economic inactivity, vacancies and wage growth remain stubbornly high, driving up the cost pressures on local firms.

“Our latest surveying found that recruitment difficulties are also weighing hard for Greater Birmingham businesses – over two thirds of those looking to recruit in Q3 of this year had difficulties doing so.

“Amid this context, many businesses we work with are deeply concerned about forthcoming increases in employer National Insurance contributions and the National Living Wage announced in the Autumn Budget.

“It’s crucial that the government takes steps to minimise the impact of increased business taxation, and delivers urgent action to drive growth, tackle the skills crisis, boost workforce health and reduce economic inactivity, including working with the business community to shape a growth strategy that can boost private sector confidence and fuel prosperity.”

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