Steps needed to tackle the UK’s skills shortage

An ongoing skills shortage threatens to undermine strong growth among manufacturers, a survey of hundreds of firms has suggested.

The latest data from the Confederation of British Industry (CBI) revealed that new orders among the nation’s SMEs had risen at the fastest rate since 1995 – when John Major was in Downing Street.

The businesses surveyed also anticipate that there will be a further acceleration over the course of the next three months.

Although senior figures at the CBI remains concerned that a continuing shortage of workers with the relevant skills could threaten to hamper output.

Alpesh Paleja, the business body’s principal economist, said:  “Growth is going strong for SME manufacturers, who are reaping the benefits of a lower pound and buoyant global growth, as seen in record expectations for export orders growth.

“But margins are clearly still under pressure, with cost pressures high, and firms expect to raise prices further to regain some ground.

“Furthermore, concerns over skill shortages have rocketed, stoking capacity pressures further.

“This underlies the importance of establishing a future immigration system that provides companies with access to talent and labour. The building blocks of a new system that meets economic needs and public concerns must start with scrapping the net migration target, which has never been fit for purpose.”

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