IoD: ‘Big question mark’ over how long strong labour market can last

Responding to latest official labour market statistics for the UK, showing there were 350,000 more people in work compared with a year earlier, Tej Parikh, Senior Economist at the Institute of Directors, said:

“The labour market is a source of strength against the backdrop of a testy economic environment, but there is a big question mark over how long this can last.

“With pay packets finally picking up, households and retailers will have something to cheer about as we reach the festive period. Meanwhile, businesses are continuing to show resilience by opening up positions and pushing for new hires.

“However, we’re unlikely to be entering a ‘new dawn’ for persistent wage growth just yet, as firms are facing ongoing struggles investing in their productivity. Business leaders are also finding it more and more difficult to fill openings as the pool of available talent shrinks.

“So, while today’s data may be a boon as Brexit negotiations enter the zero hour, it shouldn’t mask longer term challenges in driving sustained growth in salaries and alleviating skills shortages.”