By: Denis Sheehan, Publisher, H&C News
UK economic growth hit the brakes in August as a consequence of shortages of people applying for job vacancies reaching their lowest level on record, and alarmingly so amidst surging demand. Hospitality headed the list of industries impacted with more than 200,000 vacancies unfilled.
Across the economy businesses reported the slowest pace of growth since the height of the pandemic lockdown in February.
Figures from IHS Markit’s purchasing managers index (PMI) reported 55.3 in August, substantially lower than the 58.7 forecast by economists. PMI reports are recognised as a good bellwether of future economic growth. The key metric being readings above 50 showing a growing economy.
Commenting on the latest report Chief business economist at IHS Markit, Chris Williamson said: (there are) “clear signs of the recovery losing momentum. “Rising virus case numbers are deterring many forms of spending, notably by consumers, and have hit growth via worsening staff and supply shortages.”
RHA Chief Executive Richard BurnettWilliamson’s comments reflect government and media’s loss of attention to regular updates on infection levels, hospitalisations, and deaths. Nonetheless levels are clearly spooking some consumers as footfall numbers across much of the economy are falling. Yet despite this, unmet demand continues to grow.
The wider economic direction of travel has also been impacted by supply chain problems, restaurant chain Nando’s being forced to close 50 outlets due to non-delivery of essential items.
Many industry sector chiefs said government business policy related to Brexit was directly to blame for record job vacancies and supply chain setbacks.
Richard Burnett, RHA Chief Executive said that despite meeting with Transport Secretary Grant Shapps recently to warn him of the worsening situation, government continues to refuse to take any action to lessen the severe HGV driver shortage. Shapps insisting that more UK nationals are found to do this work in the UK.
Lord Bilimoria, the CBI President was clear in his views saying the immigration system needed to be updated to reflect the labour shortages.
Robert Richardson FIH, Chief Executive, Institute of HospitalityRobert Richardson, Chief Executive of the Institute of Hospitality was equally as clear as his counterpart Lord Bilimoria. Richardson told us: “Hospitality has been calling for the easing of the post Brexit immigration system for some time now.
“Commercial reality and the UK’s economic priority to get back to some semblance of normality has to take precedence over any reluctance to implement a temporary relaxation enabling such. There are many short, medium and long term issues our industry needs to address, including education around hospitality as a career of choice for homegrown talent, but none of these can remedy the human resource crisis we now face.”
Nick Allen, chief executive at the British Meat Processors Association, said the sector was struggling to get many product lines out to restaurants, with the UK’s meat production workforce down by up to 20 per cent.
Allen stated: “The supply problems are coming from the underlying labour problems. It’s certainly Brexit-related, but it’s also the immigration decisions our politicians are making since Brexit. Nando’s is the tip of the iceberg.”
With key economic indicators heading in the wrong direction, government continue to prioritise sticking to Brexit ahead of temporary changes a growing number of British business need to recover.
Hospitality apprenticeships role in addressing our people and skills shortage
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Hospitality & Catering News: PMI Index shows record vacancies slowing UK economic growth. – 24 August 2021 – PMI Index shows record vacancies slowing UK economic growth.
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