Economic recovery may be constrained by lack of skills and office space

Supply and demandThere are signs that the nascent recovery in the UK economy is already starting to put pressure on the availability of skilled employees and appropriate commercial property for the most rapidly growing sectors. While the Government has announced that the UK’s economy has been growing at its fastest rate since 2007, a new survey published by the UK Commission for Employment and Skills (UKCES ) has claimed that nearly a quarter of vacancies in the UK have gone unfilled because of a shortage of much-needed skills. At the same time, claims a new report from DTZ, demand for commercial property is strengthening with take-up growing across the country while the availability of Grade A office space is declining rapidly.

Figures from the Office for National Statistics figures show that the economy grew by 1.9 per cent in 2013, and 0.7 per cent in the fourth quarter. The upturn was confirmed by the Confederation of British Industry’s (CBI) Growth Indicator which found that output volumes in the three months to January increased by 30 per cent, the highest since September 2007.

Some sectors are particularly buoyant. According to KPMG, in its Markit Tech Monitor report,  the UK’s technology sector enjoyed a sixteenth consecutive month of growth in December, with nearly half (44 percent) of firms planning to hire more staff during 2014.

As we’ve reported previously, the tech sector is already ahead of the curve when it comes to economic recovery, but its growth has already meant shortages in the availability of appropriate office space to accommodate its success, especially in the UK’s various tech enclaves in East London and beyond.

Now according to the Birmingham Post, DTZ’s 2014 Annual Outlook report claims that the demand for commercial property is growing across the UK. However, there is a consequent shortage in the availability of grade A office space, which is exacerbated by an all-time low level of development.

Offices are not the only thing that might be in short supply at the moment. Research published by the UK Commission for Employment and Skills (UKCES ) found that while there were 559,600 job vacancies in England between March and July 2013, the number of vacancies attributable to skill shortages increased from 63,100 to 124,800 over the same period. More than a fifth (22 percent) of all vacancies are now down to lack of appropriate skills according to the survey of 90,000 employers.

According to the CBI’s director for employment and skills Neil Carberry, the report suggested that there is a particular need for the development of skilled employees in sectors such as science, technology, engineering and maths. “We must expand access to high quality apprenticeships and other ‘learn while you earn’ schemes and ensure that these meet the needs of both businesses and employees,” he said.”To equip young people with the knowledge they need, there must also be a sea change in the quality of careers advice in schools, so they are more aware of the opportunities and rewards of working in key sectors which face skills shortages.”