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Employers’ body says economic growth will be lower this year

Employers’ group Ibec says economic growth will be lower this year as a result of Brexit but also because the economy is at a mature phase of the business cycle.

The group also warns that a shortage of workers is already starting to have an effect on companies.

Ibec says growth will be around 4% this year, down from 7% last year, with labour shortages and an erosion of cost competitiveness playing a part in the slowdown.

But it says that this growth will add about 66,000 jobs to the economy.

Also wages should go up around 2.5%, say the employers, the same as last year, and inflation will stay weak at just over 1%, giving workers another year of real wage growth.

It says another 60,000 to 80,000 construction workers are needed to meet both housing demand and the Government’s infrastructure plans but says only 33,000 craft workers are on the live register meaning tens of thousands must come from abroad.

Those growth assumptions are based on the British parliament ratifying the Brexit withdrawal agreement, it says.

The group warns that a no deal Brexit means things will get a lot harder, notably for firms that export to the UK.

It says sterling could fall to an unprecedented level of 110p to the euro.

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