36. Weekly Newsletter
Supply Chain Delays
Freight delays are hampering the global economic recovery and the UK has the additional hurdle of Brexit changes to mitigate. The logistical challenges faced are further exasperated by the rise in demand which has widened the gap between output and orders to a 24-year high. Iconic Swedish brand IKEA revealed supply struggles on around 1,000 product lines to UK customers with blame placed on Brexit and the shortage of lorry drivers.
Alternatively, the iconic British brand Marks & Spencer has warned of wide-reaching problems for food imports to the UK for when Brexit rules change in October. The new rules will require lorry drivers importing goods to require approximately 700 pages of documentation at the border. According to M&S estimations, EU markets represent 25% of all UK food imports which could become widely disrupted within weeks. UK Government guidance on the topic can be found here.
COVID Update
Over 7.0m people in the UK have tested positive for COVID and with almost all restrictions lifted: cases are slowly rising again after an initial surge during August. A total of over 133,000 deaths have been attributed to the virus; the North West of England has seen the highest number of deaths whereas Northern Ireland and the North East have comparatively seen some of the lowest deaths out of all UK regions. Nationally, 48.3m people have received their first vaccine and approximately 43.5m of these patients have also received their second dose. This brings the total number of inoculations carried out, by the private sector and National Health Service, to almost 92 million.
On Monday, 6th September, the ‘return to work’ following 18 months of lockdown kickstarted with traffic returning to pre-pandemic levels. The London Underground experienced it’s busiest morning since the March 2020 lockdown due to major companies (such as Sainsbury’s, BP and Vodafone) restarting office work. Road traffic also resumed to near pre-pandemic levels (congestion rate of 61% compared to 63% exactly 2 years ago). This coincides with a incoming ‘heatwave’ over the next week after a damp August.
Labour Shortages
The Confederation of British Industry (CBI), who represent 190,000 British businesses, today warned that the nation faces 2 years of labour shortages. This is a total reverse of prior predictions where even the best case outcomes were around 6.0% for unemployment and 15.6% for the youth. Instead, national unemployment figures are down 0.2% from the previous quarter at 4.8% (less than a 1% increase from pre-pandemic levels). September additionally marks the end of the government’s job retention scheme which may help plug part of the recruitment gap.
Whilst labour shortages are considered less unfavourable than mass unemployment: recruiters now have more job vacancies than before the pandemic which is discouraging expansion. The CBI has identified labour shortages in areas such as forklift drivers, meat processing operatives, fruit/flower pickers, butchers, HGV drivers, chefs and scaffolders. Another potentially concerning aspect of the shortages, for businesses and the government, may come from the rise in economic “inactivity” caused by people taking earlier retirements or setting up their own lifestyle businesses.
