Figures from business and financial adviser Grant Thornton UK LLP reveal that while global business optimism has risen to new quarterly highs, a storm may be brewing in the shape of a worldwide skilled worker shortage, an issue keenly felt by many businesses in the West Midlands.
New findings from Grant Thornton’s International Business Report (IBR), which surveys 2500 businesses in 36 economies, show that global business optimism in the second quarter of 2017 hit at an all-time quarterly high of +51% in the second quarter of this year – marking five consecutive quarters of increases.
However, the percentage of businesses which identified a lack of skilled workers as a constraint has increased globally to just over one in three (35%) – its equal highest quarterly level ever. In the UK, 30% of businesses identified a lack of skilled workers as a constraint to growth.
David Hillan, practice leader at Grant Thornton in Birmingham, said: “This national statistic perfectly echoes the picture we’re seeing locally. Many of our clients across the West Midlands are tackling skills shortages at the moment, particularly those in advanced manufacturing and engineering – both of which are central to the future growth of the region. And with the West Midlands right at the heart of this country’s high-tech manufacturing heartland, having the right levels of skills is critical to the success not just of our region, but for UK plc.
“We need stronger partnerships between the private and public sectors, particularly between education and business. As technology continues to change the nature of work, many of today’s jobs may be non-existent in the next generation, so employers and educators need to ensure a better alignment between the needs of business and the skills available, both in the short and long term.”
According to Grant Thornton’s IBR findings for Q2, UK business optimism remains subdued compared to wider global figures; currently standing at 22%. This compares with 40% in the same period one year ago, and 79% two years ago. Encouragingly, more UK businesses are anticipating a rise in exports in the year ahead, from 14% two years ago to 22% at present.
Hillan continued “It’s understandable that UK businesses will be feeling somewhat at odds with their international counterparts given the continued uncertainty surrounding Brexit negotiations, coupled with the wider political and economic instability we’ve experienced over the past two years. The sooner we have a clear idea as to what Brexit means to the region and the UK, the better.
“On a brighter note, many of our clients are continuing to explore opportunities in markets abroad. To further regional and UK export potential, more collaboration on distribution channels between small and large firms could enable our exporters to leverage each other’s expertise and resources. Similarly, the government should be looking at ways to develop a stronger export culture, such as introducing new tax credits for the cost of researching and entering new markets.”