Unemployment dips but labour market pressures weigh heavy on firms – Chamber
Business leaders in Greater Birmingham say the rising cost of employment remains a major challenge for firms, despite a decrease in regional unemployment and an easing of wage growth.
Figures released this morning reveal unemployment in the West Midlands fell by 0.2 per cent in the three-month period to February, while employment rose by 0.1 per cent.
Compared to the same period a year ago (December 2023 to February 2024), unemployment declined by 0.4 per cent but employment fell by 0.1 per cent.
Meanwhile, the pace of wage rises has slowed and came in lower than expected but are still outpacing inflation, the Office for National Statistics (ONS) said.
There was no change at all in the growth of average weekly earnings, which continued to rise 5.6 per cent, for the three months to February.
Vacancies in the UK continued to fall – the 33rd consecutive quarterly decline. They fell by 26,000 on the quarter during the January to March period.
However, today’s figures reflect the period before national insurance increases took effect.
Emily Stubbs, head of policy at Greater Birmingham Chambers of Commerce, said: “As wage growth continues to outpace inflation, and employer national insurance hikes come into effect, the rising cost of employment is a major challenge for employers across the UK.
“In Greater Birmingham, our latest surveying suggests that more than half of firms are anticipating needing to raise their prices, citing taxation as their primary concern.
“It will be some time before we fully understand the long-term impact of employer national insurance increases on jobs, investment and the extent to which businesses can absorb and adjust to rising costs.
“The government must prioritise easing these mounting cost pressures on businesses, to enable investment and unlock economic growth.
“Looking ahead, the Employment Rights Bill continues to be a source of concern – while the government is consulting businesses, the legislation in its current guise threatens to impose further costs and complexities for employers to navigate.”
Our next Quarterly Business Report event focuses on Bridging the Skills Gap in Greater Birmingham.
