British recruiters seem to be rising from the Brexit ashes with improved UK trading.
But they are not out of the woods yet as negotiations for the UK’s exit from the European Union begin.
Hays plc (LON:HAS) was the last of the bunch to report its quarterly trading update this week, reporting a record third quarter today.
The company reported a 4% drop in third quarter like-for-like net fees in the UK and Ireland but it compared to a 10% decline the previous quarter following the initial shock of last June’s Brexit vote.
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Like-wise PageGroup plc (LON:PAGE) yesterday reported flat first quarter UK gross profit but that compared to a 6.7% drop in the fourth quarter.
Robert Walters plc (LON:RWA) on Tuesday reported a 27% increase in UK net fees to £23.9mln despite worries of risks arising from Brexit.
"Following on from better-than-expected numbers from FTSE 250 rivals Robert Walters on Tuesday and PageGroup on Wednesday Hays has today become the third big recruitment firm to show improved fee momentum not only abroad but at home, to suggest the UK economy is still doing better than many had feared it would after the referendum vote last year," said Russ Mould, investment director at AJ Bell.
However, Mould warned that keeping this up might prove challenging as the outlook remains unclear.
UK firms face recruitment hurdles post Brexit…
UK employers in the manufacturing and services industries are struggling to find staff with the right skills and it’s about to get even harder after Brexit, a survey showed today.
The British Chambers of Commerce, which surveyed 7,300 businesses in the manufacturing and services sectors, found that both sectors faced “high levels of recruitment difficulties”.
The report revealed that in the first quarter 74% of manufacturing firms were finding it difficult to source new employees while 58% of services companies had the same problem.
.@BCCAdam comments on the importance of access to skills and labour #ChamberQES https://t.co/iiHPDjeKh8 pic.twitter.com/lRODBp6LoG
— BCC (@britishchambers) 13 April 2017
Demand for staff grew in the manufacturing sector following a strong performance in the first three months of the year, as a weaker pound helped exports. However, rising costs of overheads and raw materials present a risk to growth.
The service sector also showed improvement since the initial shock following the Brexit vote.
“The rise in inflation seen since last year's EU referendum is the biggest immediate pressure facing most firms,” said Adam Marshall, director general of the BBC.
“While manufacturers have enjoyed a good quarter, they are facing higher costs at the factory gates, which increasingly translates into companies having to raise their own prices.”
Marshall expects the squeeze on firms looks set to continue in the medium-term as inflation is already above the Bank of England’s target of 2%.
UK lenders to tighten credit supply...
British lenders are planning to hold back supply of credit to customers in the next three months, according to a Bank of England survey.
A net balance of 18.8% of UK lenders expect to rein in the availability of unsecured credit to consumers over the next quarter, the most at any time since the 2008-09 financial crisis.
It compares to 7.9% of banks reported in the BoE's last quarterly conditions survey.
EU working to push Britain out of space....
British companies could be kicked off the European Union’s Galileo satellite project after Brexit, according to reports.
The European Commission is reportedly calling for the right to cancel existing contracts with UK firms for the latest phase of work on the satellite navigation system
The latest works, which are estimated to cost €10bn, is managed by the European Space Agency.
A consortium of the UK’s SSTL, a subsidiary of Airbus, has provided a majority of Galileo’s existing satellites while British companies with interests in the project include QinetiQ, CGI, Airbus and Scisys.
Spoke at big #Engineering event, for IET. Concern over highly successful UK #Space industry with threat to Galileo project after #brexit
— Vince Cable (@vincecable) 13 April 2017
Tory MP Philip Davies told the Telegraph: “This is more evidence that the EU is an inward facing backward looking protection designed to protect inefficient EU businesses and French farmers.”
"That is why an outward looking, international, free market country like the UK does not belong there."
The UK government will need to negotiate a new security relationship with the EU to retain access to Gaileo after Brexit.