According to the latest Business Confidence Monitor published by the Institute of Chartered Accountants in England and Wales and business advisers Grant Thornton, employers continue to face increasing challenges over skills shortages, which is a concern for productivity and growth.
The BCM for the first quarter of the year reveals:
- Confidence in the region has stabilised, with a confidence score of +13.4, in line with +13.1 level in Q4 2015;
- Sales growth has slowed from 6.5% year on year to just 3.3% in Q1 2016;
- 28% of businesses say that the availability of non-management skills is a greater challenge than 12 months ago;
- Turnover growth is also down from 6.7% a year ago to 3.7% this quarter;
- Staff development budgets are set to increase by 2.8% over the next 12 months.
ICAEW East of England regional director Phillippa Bourne, said: “The early signs are that 2016 is seeing both challenges and opportunities for businesses in the East of England, including the EU membership reform which could prove to be a testing time for business.
“Confidence in the region is stable, and remains firmly in positive territory which is good news for the area.
“While sales and turnover growth has slowed this quarter, businesses expect their financial performance to improve over the next 12 months as confidence stabilises.
"A planned increase on staff development budgets over the next 12 months may initially put pressure on business finances.
"However, it is a necessary response for businesses continuing to expand as businesses can retain skilled and experienced staff which should boost productivity – a key driver of economic growth.”
Kevin Gale (pictured), head of Grant Thornton’s Milton Keynes office, added: “While uncertainty over the UK’s future in Europe is undoubtedly quashing confidence, there is certainty on the horizon now a referendum date has been set for June. Whichever way the vote goes, businesses will soon be able to plan ahead with conviction.
“As our recent Buckinghamshire Limited report highlighted, recruiting and retaining people with the right skills remains a key issue for local, progressive companies so allocating more resources to upskilling existing staff is a positive move.
“However, the National Minimum Wage is also set to rise from April and changes to business rates will be announced in next month’s Budget.
“Businesses in Milton Keynes will therefore need to keep a close eye on the bottom line whilst pushing ahead with growth plans – a delicate balancing act to achieve.”
