UK businesses ‘stable’ but skills shortage fears growing

New CBI survey reports UK businesses are stable, but there are growing concerns over skills shortages

Business conditions for UK small and medium sized enterprises (SMEs) stabilised over the past quarter but the looming skills shortage is still cause for concern, warned the latest Confederation of British Industry (CBI) quarterly trends survey.

The survey of 441 firms – which included food and drink manufacturers – reported total new orders and new domestic orders increased in the three months leading to April, while export orders fell.

More than a quarter of the companies surveyed said their volume of output was up, while 25% said it was down. Companies expected output to increase in the next quarter.

The companies interviewed said they were optimistic about demand for exports, with a 23% expecting export orders to grow over the next three months.

Depreciation of the pound’

CBI director for economics Rain Newton-Smith said: The depreciation of the pound since mid-2015 will be welcomed by exporters.

“The government could and should do more to help by establishing an exports commission that can look at the challenges and opportunities for exporters more closely.”

Meanwhile, the skills crisis was highlighted as a growing concern, which could limit output.

Spending on training and retraining rose by 26% and almost a third of small and medium-sized manufacturers reported they were employing more people than three months ago.

‘Skills shortages’

Higher spending on training is often a sign that skills shortages are biting again,” said Newton-Smith.

This further underlines the need for business and government to work together in the coming months and make sure we get the design of the apprenticeship levy right, so it can deliver the quality skills training that firms need.”

A previous CBI survey from last month reported general manufacturing output remained stable over the past quarter but orders had fallen.

It found total new orders decreased in the three months to April, matching the decline in the previous quarter. To read more click here.

To read the CBI’s latest survey click here.

Read the key survey findings in the box below.


Business survey - at a glance
  • 26% increase on training and retraining
  • 5% rise in domestic orders
  • 1% rise in volume of output

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