Wales saw the highest increase in employment across the UK this year, according to KPMG UK’s latest Economic Outlook report.
Between September 2017 and September 2018, employment rose by 3.7% in the country while the majority of the UK had below a 3% increase. The North East for example, saw a 2% drop in employment.
The report also reveals that businesses in Wales appear to be some of the most resilient in the UK during turbulent times. While all regions indicated a slowdown in growth as the UK goes through uncertainty due to Brexit, Wales along with the West Midlands, remain positive leading the way for the UK in October.
However the report highlights that Welsh workers did not benefit from a notable increase in wages this year as Wales lagged behind the UK in terms of earnings growth. It was third from the bottom of twelve regions with under a 1% rise, while wages in East Midlands for example, grew by 7.4%.
Simon Jones, Senior Partner at KPMG Cardiff, said:
“There are reasons for Wales to be optimistic. Investment in infrastructure by the Welsh Government is starting to take effect and the City Deals in Cardiff and Swansea will hopefully act as a catalyst for economic growth in the region. Unfortunately this has not yet been reflected in a notable increase in wages, likely because the demand for jobs in Wales continues to be high, so the competition for candidates that can be seen in other parts of the UK is not so prevalent”.
Considering the UK as a whole, the report highlights the limited spare capacity available for the economy and the need to improve productivity to lift growth prospects.
Yael Selfin, Chief Economist, KPMG UK, commented:
“Looking ahead to 2019, we are bracing ourselves for one of the most eventful years in Britain’s recent history. However, while Brexit is likely to dominate a large part of next year’s agenda, it is important that we don’t let it cloud our vision to other opportunities and risks around us. While tightening credit conditions globally and continued geopolitical tensions are also sure to produce some hairy moments in 2019, capitalising on new markets and products would help the UK economy to grow.
“The UK’s economic challenges go beyond Brexit, and more focus should be turned towards improving productivity and social inclusion as finding solutions for these two problems will go a long way to improving the UK’s long term prospects.”