THE GOVERNMENT and Parliament must break the Brexit deadlock and find a way forward warns the Federation of Master Builder (FMB), in response to the latest Construction PMI data, which shows another drop in construction output.
The March 2019 PMI data revealed an Index score of 49.7, up slightly from 49.5 in February, against the no change threshold of 50.0. This points to a sustained decline in construction output, representing the first back-to-back fall in construction output since 2016. While the residential building sector enjoyed an upturn, commercial construction was the worst performing area.
Commenting on the results, published this morning, Sarah McMonagle, Director of Communications at the FMB, said: “The construction industry is being seriously affected by Brexit uncertainty as evidenced by two very worrying sets of results for construction output in the first quarter of 2019.
“Businesses have been waiting for politicians to come to some resolution for far too long now, and it’s time that this deadlock was broken. It’s not surprising employers are finding it hard to plan for the future, when we don’t even know when, or indeed if, we’re leaving the EU. Today’s results are a reminder of just how vulnerable the construction industry is to political turmoil as confidence among consumers and contractors continues to wobble.”
Ms McMonagle concluded: “Brexit uncertainty and the construction skills shortage have created a perfect storm in our industry.
“Around 9 per cent of construction workers in the UK are from EU countries, but we know from speaking to small construction employers that many of these skilled workers are starting to return, whether that’s because of strengthening economies elsewhere, or that they simply don’t feel welcome anymore. This is compounding an already severe construction skills shortage, and I’m worried that the Government’s post-Brexit immigration system will make it even worse. For example, the system will not allow Level 2 tradespeople to live and work in the UK for more than 12 months at a time. At the same time, the Government’s figures last week show that the number of Level 2 apprenticeship starts among our domestic workforce is dropping.
“It’s quite simply not possible to build the homes and infrastructure we need without bricklayers, carpenters and plasterers. The Government and industry must work together to attract more people into the industry, by offering them high quality training with clear career pathways for progression but in the meantime we need sustained access to tradespeople of all skill levels for the industry to continue being open for business.”
Elsewhere in the economy, the Federation of Small Businesses has expressed concern at the UK’s productivity growth in Q4 of 2018 decreasing for the second consecutive quarter.
Federation of Small Businesses (FSB) National Chairman Mike Cherry, said: “Today’s data highlights yet again the impact of the political and economic uncertainty to the economy.
“Small business confidence has fallen through the floor as firms face a trying time amid a fragile economy.
“While there were some positives in the data such as a 0.4% productivity increase in services, there was a significant 1.1% decrease for manufacturing.
“Small firms are not only contending with unprecedented uncertainty, they are also dealing with a raft of new cost increases and reporting requirements.
“Rising labour costs have continued with the introduction of Making Tax Digital, fresh hikes to business rates and a further increase in auto-enrolment pension contributions.
“In order to improve productivity, key areas that must be addressed include management and leadership, broadband connectivity and the scourge of late payments.
“All this amid the ongoing uncertainty over the future of the UK’s relationship with the EU which shows no sign of reaching a resolution.
“Productivity will only continue to decline unless the Government can do more to step up and back British businesses.”
University to host industry summit online
SUPPORTING industry’s recovery from the impact of the pandemic is a key priority for the University of Wales Trinity Saint David (UWTSD).
The University has a track record for working with industry through knowledge transfer, research innovation, workforce development and by providing a ready pipeline of skilled students and graduates, in partnership with employers.
In addition, UWTSD’s MADE Cymru initiative was established to support manufacturing industries in Wales to adapt to the challenges of Industry 4.0.
The initiative, funded by the EU via the Welsh Government, aims to support the economic recovery of manufacturers in Wales by offering part and fully funded training to businesses to upskill staff, as well as research and development that improves processes and products to reduce waste and costs.
In addition, UWTSD and MADE Cymru have organised an Industry Summit to be held online between June 8-10 to inform, engage and inspire businesses during this critical period of post-Covid recovery.
Expert speakers will be sharing their insights including James Davies from Industry Wales, Carol Hall, Regional Investment Manager, Development Bank of Wales, Chris Probert, Innovation Specialist, Welsh Government and Geraint Jones, Knowledge Transfer Adviser at KTN.
The line-up also includes Welsh manufacturers who will be sharing their own experiences, including Tim Hawkins, Managing Director, Markes International, Julia Chesney-Roberts, Commercial Manager, Riversimple, Angus Grahame, Founder of Splosh and Jacques Bonfrer, Co-Founder and Team Lead, Bot-Hive.
There will be guest talks from circular economy expert Eoin Bailey and lean author Daryl Powell and an opportunity to find out about the range of services offered by the University.
Graham Howe, Executive Head of the MADE Cymru project at UWTSD says: “This Industry Summit aims to explore issues and challenges facing manufacturing in Wales so that we can work together with employers to find solutions.
“We always start with asking a manufacturer what their biggest problem is today and look at how we can help them with it.
“We aim to unravel potentially confusing challenges like these. Our approach begins by looking at what companies need to increase their productivity and competitiveness.
“We aim to lead the businesses we work with through a journey of continuous improvement – a journey that makes the most of Industry 4.0 technologies and their ever-growing digital capabilities to help solve the specific problems faced by each company.
“All of the feedback we receive from businesses shapes our curriculum – we want to produce employable, digitally literate graduates who can contribute to their workplace from day one”.
Alison Orrells is CEO and Managing Director of Safety Letterbox and has been one of the organisations participating in the MADE Cymru initiative.
She said: “It was important to keep innovating and investing to set us apart and come out stronger. It’s been intense but we had a game plan – now it is all about business future-proofing, being agile, collaborations and being adaptable.”
Covid-19 has affected every part of a business and shifted the focus from production to survival.
UWTSD recently led a round table discussion with Welsh manufacturers about the future of manufacturing in Wales.
That discussion found that their outlook is positive about the future.
Manufacturers accelerated their adoption of new technologies to enhance and optimise production.
With many employees on furlough, managers took the opportunity to rethink and invest in better IT, particularly communications, training and diversified into new product areas. They looked to local colleges and universities to help shift perceptions of jobs in manufacturing and demonstrated the career opportunities and pathways available.
They also loosened their reliance on overseas imports and looked for suppliers in the UK to minimise future risk of disruption.
All sessions of the Industry Summit are free to attend and places can be booked on the UWTSD website: https://uwtsd.ac.uk/made/made-cymru-industry-summit/
Casual and part-time workers: Most vulnerable to job loss
A NEW series of reports that focus on the effects of Coronavirus on employment in Wales was published on Thursday, May 27, by Public Health Wales.
Young people, and those in precarious work have been identified as being especially vulnerable to employment changes caused by the pandemic, with mental wellbeing and struggles to find or keep work cited as major concerns.
Many young people are unaware of the support that is already available and how to access it, suggesting a greater need for organisations to engage with young people on a deeper level, to find solutions to the barriers they face for gaining good, fair employment –critical for people’s good health and wellbeing.
FURLOUGH HAD UNEQUAL IMPACT
Dr Benjamin Gray, Public Health Researcher at Public Health Wales, said: “18-29-year-olds are the age group with the highest proportion placed on furlough (41%) and 2.5 times more likely to have been placed on furlough than the 40-49 years age group and as such risk an uncertain future. Furlough could potentially mask a longer-term impact of Covid-19 on unemployment, and this is a concern, especially amongst this age group.”
Dr Ciarán Humphreys, Consultant in Public Health with the Wider Determinants of Health Unit at Public Health Wales, said: “Young people have told us they have been hit by a multitude of factors that will potentially have long-lasting effects on their employment prospects.
“It’s not just about being in work, though. It is the nature, quality, and long-term prospects of that work – good, fair work, that’s so important for people’s health. We saw this impact play out in the study.
“Some working young people we heard from struggled with the impacts of work changes outside their control on their mental wellbeing, whereas most of those in stable employment generally felt well, supported by their employer, and confident about the future.
“We know that at UK, Wales and local levels there have been important actions taken to mitigate the impact of these employment changes. However, some of these are expected to come to an end.
“A clear message from our work is that it will take a range of approaches to support young people responding to the employment challenges of the pandemic, to improve health.
“Action can be taken at national, regional and local level. Employers, too, have an important role in helping young people into good quality work, and that includes public sector organisations.
“If we are to safeguard future health we will need to work collaboratively and effectively, involving young people.”
The reports are the first in a series of planned employment analysis by the Public Health Wales Population Health programme exploring the impact of Coronavirus on the Welsh labour market and will help inform policy and decision-makers.
Further phases of the research will look at how challenges could be addressed as the economy reopens and recovers, so that those most at risk of longer-term harm from the crisis can secure decent quality future employment, training, and education.
Key findings across the reports were:
• Around a quarter of a million workers were employed in shutdown sectors in Wales (18 per cent of all workers) at the outset of the pandemic with young workers (aged 16-24) much more likely to be employed in shutdown sectors (36 per cent compared to 11 per cent of those aged 35-64).
• Young people faced varied and complex challenges due to the pandemic. In addition to the challenge in gaining, retaining, and partaking in good, fair work, issues raised included the effects of the temporary lockdown, such as disruption of vocational learning and home-schooling, or exacerbation of pre-existing issues such as the nature of employment for young people, Brexit and reported lower uptake of universal credit.
• Those who work in low-paid, insecure work have less protection and rights due to the ‘flexible’ nature of their jobs. Young people are chief among these due to the specific sectoral trends in employment contract types. These employment changes have also translated into significantly different impacts for distinct groups, with those living in deprived areas of Wales appearing to have fared worst.
• There is substantial uncertainty about the future, especially when government schemes such as furlough come to an end as these cushioned the economic pain caused by the pandemic.
• Young people have been disproportionately affected by the pandemic and are likely to feel the effects for some time with concerns over scarring effects on job prospects and the potential for higher tax in the future to pay for the financial support schemes introduced by the Government during the pandemic.
• While interventions are perceived by decision-makers and influencers to be available, apart from the furlough scheme, young people in this study did not, on the whole, appear familiar with them or accessing the support.
• It will be critical to ensure young people are involved in the development of future support.
• Evidence suggests that labour market policies can substantially impact the health of both the employed and unemployed populations in a positive way.
• A range of policies are linked with improved mental and physical health outcomes, as well as reduced health inequalities; however, some, such as benefit sanctions, have been linked to either no health benefit or even harm.
Welsh business confidence highest since 2014
BUSINESS confidence in Wales has grown to its highest level since 2014, a new report from chartered accountancy body ICAEW has found.
The Business Confidence Monitor(BCM) report for Wales found that confidence had climbed to its highest level since the third quarter of 2014.
This was likely due to the successful rollout of coronavirus vaccines, which led Welsh businesses to expect a strong economic recovery with hopes of large increases in domestic sales following falls over the past year.
Businesses reported that domestic sales had fallen slightly, while exports suffered the biggest fall seen since the BCM began in 2004, as global demand fell sharply during the coronavirus crisis and lockdowns reduced companies’ ability to transport their goods abroad. The contractions in sales also led to profit levels falling for many businesses.
A third of Welsh businesses said customer demand was a growing problem, but regulatory requirements were the most widespread concern, cited by over a third of companies. This was likely because of post-Brexit customs controls which affected Welsh exporters who are more reliant on the EU market than in other parts of the UK.
Some 30% of businesses cited transport problems as a growing source of difficulty, compared to 16% the year before.
Employment levels stayed largely the same over the past year. This was helped by the extension of furlough scheme, which should continue to limit job losses, at least temporarily.
Beverley Waters, ICAEW Regional Director for Wales, said:“It’s positive news for the Welsh economy that businesses are feeling more confident for the future, doubtless a reflection of the vaccine rollout and prospects of a strong recovery.
“While challenges remain, Welsh businesses expect domestic sales and exports to increase once again. This is a positive outlook for our economy, which is needed after a difficult year.
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