Companies are struggling to keep ‘wage inflation’ to manageable levels
New figures reveal that wage growth has caught up with rising prices for the first time in nearly two years.
While this is good news for workers, it is providing significant challenges to many Shropshire employers as they wrestle to stay on top of spiralling running costs.
Ruth Ross, chief executive of Shropshire Chamber of Commerce, said: “These latest statistics reveal that regular pay, excluding bonuses, rose by 7.8% in the period from May to July compared with the previous year.
“This matched the pace of inflation over the same period – which means people’s ‘real pay’ is no longer falling.
“While that is clearly good news for workers, it offers little comfort to businesses which are having to soak up rising operational costs, while struggling to contain wage inflation arising from candidate expectations and workforce pay settlements.
“Recruitment issues remain a top concern for business, and companies in worst-hit sectors such as hospitality, retail and manufacturing are still finding it tough to attract appropriately skilled staff at sensible wage levels.”
However, the latest economic figures also revealed a fall in job vacancies - reflecting a weakening economic outlook, according to the British Chambers of Commerce which predicts further growth in unemployment during the next three years.
“Underneath these headline figures the skills crisis continues and the labour market picture will remain challenging. Our message to policymakers is clear, invest in skills now for a more prosperous economy,” it says.
The latest quarterly economic survey from Shropshire Chamber revealed that cashflow and profitability were mounting concerns for many local businesses.
