Manufacturers face worst staff scarcity since 1989 after Brexit leads to exodus of EU workers

Manufacturers are struggling with the worst drought of workers in 30 years, as fewer EU workers come into the country in the wake of the Brexit vote.

Labour shortages in the sector are at their worst since 1989, according to research, with Brexit-related uncertainty partly to blame.

A report by the British Chambers of Commerce today revealed 81 per cent of manufacturers that tried to recruit in the last quarter had difficulties finding the right staff.

Meanwhile, the services sector was not much better off, with 70 per cent of firms reporting the same shortages – just two per cent off the record high charted in the previous quarter.

Adam Marshall, BCC director general, said that while Brexit was occupying all the government’s attention and resources, recruitment was another cause of uncertainty.

EU workers in the UK fell by 132,000 in the three months to the end of September 2018, the biggest drop since records began.

Home secretary Sajid Javid is planning to reduce immigration from the EU by 80 per cent after Britain has left the bloc. 

He is looking to impose a £30,000 a year minimum salary threshold to those entering the country for work, something which currently applies to all immigrants except those from the EU.

Marshall said: “Given the magnitude of the recruitment difficulties faced by firms clear across the UK, business concerns about the government’s recent blueprint for future immigration rules must be taken seriously – and companies must be able to access skills at all levels without heavy costs or bureaucracy.”

The news comes after the latest manufacturing purchasing managers' index indicating sector activity had spiked in December, as firms scrambled to stockpile parts and materials to mitigate the impact of crashing out of the EU without a deal.

The quarterly economic report also revealed the UK’s services sector reported the slowest sales growth in two years during the final quarter of last year.

“The UK economy is in stasis,” said Marshall. “With little clarity on the trading conditions they'll face in just two months' time, companies are understandably holding back on spending and making big decisions about their futures.”

The survey of more than 6,000 businesses was carried out from 5 November to 26 November last year – this was before Theresa May postponed the parliamentary vote on her Brexit deal because of a lack of support in the Commons.

“The government’s absolute priority now must be to provide clarity on conditions in the near term and avoid a messy and disorderly Brexit. Business communities won’t forgive politicians who allow this to happen, by default or otherwise,” Marshall added.