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UK firms hit by labour shortages

The British Chamber of Commerce calls for greater Brexit clarity as research finds more companies than ever before are finding it hard to recruit staff

British employers in manufacturing are facing the biggest shortage of skilled labour in 30 years, as more than four-fifths (81%) struggled to hire the right staff in 2018, according to the British Chambers of Commerce (BCC).

The BCC’s research found similar challenges in the services sector with 70% of firms reporting difficulties with finding staff with the right qualifications and experience. The sector, which includes banks, hotels and restaurants, and accounts for about four-fifths of the economy, also reported weaker domestic sales.

These recruitment challenges come as the UK employment rate stands at the highest level since 1971, while unemployment is at its lowest since 1975. Net migration is also at a six-year low, with a weaker pound and tougher immigration laws making Britain a less attractive place to work.

The BCC cited the lack of clarity over Brexit as a key contributor to these shortages and said the government must recognise the urgency of addressing recruitment difficulties as restrictions are placed on EU workers.

“Given the magnitude of the recruitment difficulties faced by firms across the UK, business concerns about the government’s recent blueprint for future immigration rules must be taken seriously – and companies must be able to access skills at all levels without heavy costs or bureaucracy,” said Adam Marshall, director general of the BCC.

The national body called on all political parties to prevent a “messy and disorderly” exit from the EU. “The UK economy is in stasis. While it’s not contracting, it’s not growing robustly either. Throughout much of 2018, UK businesses were subjected to a barrage of political noise and drama, so it’s no surprise to see firms report muted domestic demand and investment,” Marshall added.

“The Government must demonstrate it is ready to act to turbo-charge business confidence.”

The Bank of England has previously said that the majority of businesses in Britain have not done enough to prepare for a no-deal Brexit scenario.

The BCC surveyed more than 6,000 firms, employing over one million people across the UK.