Financial help needed to 'turn the tide' on labour market struggles - Chamber

Business leaders in Greater Birmingham today called for fiscal intervention from government to help “turn the tide” on longstanding labour market challenges - as new figures revealed the West Midlands has the largest unemployment rates of an UK region.

Data from the Office for National Statistics revealed a boost in spending power for households, as basic wage growth in July outstripped the rate of inflation for the first time in more than 18 months.

Wages excluding the effects of bonuses, were up 7.8 per cent compared to the same month a year ago.

However, businesses face mounting pressures as a result of skills and labour market constraints.

In the three months ending July 2023, the employment rate estimate in the West Midlands fell by 0.4 per cent to 75.1 per cent, while unemployment rose by 0.1 per cent to 5.0 per cent.

Over the year, from the May to July 2022 period to May to July 2023, employment across the region decreased by 0.2 per cent, with unemployment rising by 0.4 per cent.

Nationally, job vacancies fell by 64,000 to 989,000 in the June to August 2023 period. Vacancies were down by 268,000 from the same period last year, although remain 188,000 above pre-pandemic levels.

Emily Stubbs (pictured), senior policy and projects manager at Greater Birmingham Chambers of Commerce, said: “While regular pay is improving for those in work, firms continue to face enormous cost pressures as a result of incredibly tight labour market conditions.

“Last quarter, surveying by the Greater Birmingham Chambers of Commerce found that over two-thirds of Greater Birmingham businesses looking to recruit new staff faced difficulties doing so, and labour costs were the most significant factor driving up prices.

“Meanwhile, the West Midlands has one of the highest unemployment rates of any region in the UK, with many talented individuals unable to access jobs.

“At a regional level, the Chambers continue to work collaboratively with businesses, educators and stakeholders to ensure the right infrastructure and provision is available to meet the needs of local employers.

“However, in the current economic environment, fiscal intervention is urgently needed from national government to invest in skills and turn the tide on these longstanding labour market challenges.”

Complete the Chamber's latest Quarterly Business Report survey to let us know how your business is faring in the current economic conditions and be in with a chance of winning a £100 voucher to spend at McArthurGlen Designer Outlet West Midlands (terms and conditions apply).