Business Sector Updates
Science
Market conditions are currently buoyant with good levels of opportunities and demand. Recruitment is proving challenging with many job vacancies, although specialist science is particularly hard to recruit to. Working from home is seen as a request for many new recruits where this would previously not have been the case. Mental health and resilience issues seem to be prevalent and are requiring a lot of support. There are many supply chain issues, with shortages and delayed delivery and high price increases. Particularly there are challenging lead times for various IT or science equipment and imports and exports still presents delays and challenges.
Food and Drink
Recruitment and costs were challenging but otherwise there is a very strong pipeline in the industry at present. The impacts of Brexit are not going away – highlighting the issues around the use of Titanium Dioxide (TiO2) in food and medicines – and that processes with regards to delays and checks may become harder.
Marketing & Media
Digital Marketing and TikTok are being used more widely which is having a positive impact on content creation. Digital products, however, are more up and down with current uncertainty. There was a big increase in public sector work in digital marketing during the pandemic, but this was dropping off now as funding comes to an end. People are seemingly being either cautious and not doing anything with regards to marketing or they are throwing everything into it – there is a need for consistency across the sector. With regards to recruitment, more sub-contracting is taking place and finding recruitment harder. Hybrid contracting is still very much in evidence. Mental health is an issue and it is key for any business to focus on this and provide appropriate support for teams.
Transport & Logistics
Mental health is also an issue in this area and more mental health first aiders have been recruited. Availability of equipment has not changed but prices have increased approximately 20% in the past year and there is no security in a quote any more. Driver issues have stabilised as have issues around the price of fuel. Maximum risk insurance has been doubled and the company are now out and about visiting customers.
Manufacturing
There is a focus on local business pushing in the UK to widen the portfolio in construction. Some issues arising regarding materials being more expensive so therefore costs were increasing. However, in terms of volume there seem to be strong pipelines which seem secure. TiO2 was also an issue in the manufacturing industry and infrastructure investment is taking place to hopefully offset the potential impact of any bans on legacy additives.
Education
There were currently 47 major consultations and policy changes underway including skills build and there was a legal duty on further education providers to work collaboratively and links with LSIP and SDF are ongoing. Working with the healthcare sector on a pilot which has been very successful and included a ministerial visit. Currently saying to government that there needs to be flexibility if work is to continue, particularly with regard to the adult education budget. SDF2 was renewable and there was a policy shift in level 3 delivery (A level equivalent) and pilots in electrical qualifications are being undertaken. There is a pilot in health and social care next year although there is currently some concern regarding government thinking on this. There is huge pressure on pay with the unions pushing for pay increases, but the only way to increase pay is to reduce the workforce. Education is still dealing with the fallout from teacher assessed grades. Pupils are arriving with the qualifications but not the skill sets to support them. There has been a decrease in the numbers of students taking GCSE English and Maths and levels of resilience also seem to be dropping year by year (both pre and post Covid). Mental health, as elsewhere is a challenge.
Legal
The issues in the legal sector are similar to those raised elsewhere. The biggest issues in the legal market are currently staffing and recruitment. There are no problems attracting people through the door at entry level, but mid-level recruitment (5 years +) is more challenging. There is also a big push now for flexible and hybrid working. The tide is turning in what staff are prepared to tolerate. In recruitment the reach has broadened over the past few years. There are more international candidates and costs are lowering due to more virtual training opportunities. The flip side to this is that resilience issues are showing up more particularly among newer entrants. It is proving to be more challenging for this group to readjust to going back to office working. Overall the market is buoyant and busier than ever, with the only area that is dropping off being litigation. Delays in employment tribunal cases (taking up to 2 years) are shows the challenges for both companies and individuals.
Distribution
We have seen significant issues within the nickel alloy distribution market this year. At the beginning of March, the London Metal Exchange suspended trading on nickel due to a huge overnight spike in trading prices (it went from US$ 20,000/tonne to US$ 100,000/tonne!). Trading was recommenced after two weeks of suspension, initially trading around US$ 35,000/tonne and is currently trading around US$ 28,000/tonne. This was after the LME introduced daily limits on allowed price movement. The main reason for this was fears over supply following the Russian invasion of Ukraine, as Russia supplies an estimated 17% of world nickel. This whole situation has had a knock-on effect, with nickel alloy producers raising prices significantly, as well as introducing an energy surcharge on top, applicable at time of shipment. This, in conjunction with price rises on other items such as packaging materials, transport costs and our own energy price increases has meant an extremely difficult and volatile trading situation in our industry. Finally, we experienced some significant delays in bringing material into the UK through UK customs during March & April – a knock-on effect of Brexit. Overall, it’s been a fun few months!
Engineering
Energy and materials becoming more expensive was showing in terms of contract costs and the lengths of contracts are being adjusted in consideration of this. – example of JCB contract material that was previously £70 was now £200, an extreme example but one that does show the impacts – Differentials show the need to keep looking around for new suppliers. Inflation was an issue that was not ‘going away’. Issues around skills and mental health were acute. Bradford factor being used for absenteeism is showing higher numbers. Relying on investment in tech, automation and digital systems. This is having a positive effect on business but is very expensive. From a policy perspective the sector is looking at government to invest in productivity that does not create jobs.
Banking
Cash reserves remain ok but warning customers not to let debtors slip. It was important to discuss inflation risk with all clients so be prepared when talking to Banks. Sanction risks are also becoming an issue with financial institutions due to the Russia – Ukraine conflict. Supporting sustainability also becoming higher profile with banks wanting to play their part. Responding to mental health issues within the sector as well as foodbank provision were important – showing that business can be a force for good.