With the current state of the economy and the cost-of-living crisis constantly at the top of the headlines, we could be forgiven for thinking that all is lost, and the world is nothing but doom and gloom.
But it’s important to remember that what we read is often only one interpretation of facts. And amongst the nothing but bad news there are some glimmers of hope on the horizon. In this article we try to offer some more positive facts about the economy, and the state of the working landscape, to provide some positives to balance out the bad news.
Growth in average total pay (which includes bonuses) and regular pay (excluding bonuses) was 6.1% in August to October 2022, the highest growth rate since the pandemic began. And while this still represents a fall of 2.7% when adjusted for inflation, it does show that employers are at least trying to keep up with rising costs of living.
The private sector is predictably faring better than the public sector however, with regular pay growth of 6.9% versus 2.7% for the public sector. ONS figures found that the finance and business services sector, as well as wholesaling, retailing, hotels and restaurants saw the highest growth rate. Perhaps unsurprisingly these industries are also the ones which are suffering the biggest skills gaps.
The IMF last week said that the UK is the only major economy expected to shrink this year, however the Chancellor himself recently pointed out that the UK actually “outperformed many forecasts last year.” With a 4.4% year on year growth in British GDP in the second quarter of 2022, this was much higher than predicted, and shows that predictions are just that, not facts.
And if you look over a longer period, the picture is even more positive. Growth figures from the Organisation for Economic Cooperation and Development (OECD) showed a GDP growth rate of 20.7% from Q1 2010 to Q3 2022, behind only the United States and Canada, but still ahead of rates seen in Germany, France and Japan.
And with a surprise growth of 0.1%, instead of the predicted 0.1% contraction, Britain might avoid a technical recession (two consecutive quarters of contraction).
The economy is always shifting, and organisations should look for opportunities to grow and outperform predictions during periods of economic flux.
World economic growth figures are lower than expected, but Global GDP is still predicted to increase by 1.7% this year. This is positive, but while low it’s still not the end of the world, much worse global growth was seen following contractions in 2009 and in 2020.
The WEF Chief Economists Outlook shows that even the world’s top economists can’t agree on what to expect for 2023, with 32% of them saying that they believe a global recession to be extremely unlikely, while only 18% of respondents said that it was extremely likely.
The economy, both UK and international, is always growing and contracting and will continue to do so until the end of time. If you are concerned about how to navigate a period of change, check out our Forecaster tool where you can get an almost instant prediction of your payroll needs for the next 12 months. No guessing required.
While the UK economy is likely to contract over the following twelve months, not all industries are equal. And our net-zero economy is growing at a very fast rate.
A recent report by the Energy and Climate Intelligence Unit (ECIU) suggested that net zero efforts are worth £70bn.
And not only that, but the growth in energy transition firms have brought investment to areas of the UK which were declining, including Tyneside, Merseyside, and Derbyshire. This is fantastic news in the wake of the Chancellor’s recent promise to bridge the north/south divide and bring economic growth to all areas of the UK.
And finally, while the last few years have seemed to offer nothing but doom and gloom, it is important to remember that nothing lasts forever. Spring always follows winter, day always follows night.
To be successful despite periods of uncertainty, organisations need to partner with companies who can offer expert knowledge and support, consistent service and ensure compliance.
JMK Group UK have been helping clients and contractors around the UK with compliant payroll options and exceptional customer service for many years. If you would like to find out more about how we can help you grow over the next 12 months, don’t hesitate to get in touch.
Since 2002, JMK have been compliantly consolidating back-office, accountancy and payroll functions.
We have evolved to provide a range of expert services; such as Funding, becoming a leading provider to the contracting industry.
We know every agency is different in some shape or form, even if only by a little, but important bit. Combining our knowledge and experience of multiple sectors enables JMK to support you all from recruiters and payroll, through to finance, compliance and management.
With JMK as your trusted partner, even the smallest team can process the largest payroll, regardless of payroll type.
Have a look at the wide range of services our Funding can provide to you and your business, it is far more than just payroll and finance.