Clearview National December 2018 - Issue 205 | Page 22

INDUSTRYNEWS
FORECAST FOR FENESTRATION:
A PERFECT STORM
Promac Group has warned that heading into the new
year, the UK window industry faces a perfect storm
of wage inflation and declining availability of labour.
» » FIGURES PUBLISHED BY THE
Office for National Statistics (ONS) in
October, reveal that wages were 3.1% up in
the three months ending in August, on the
same time last year, representing the largest
average wage increase since the 2008 economic
collapse.
Combined with a significant fall in net
migration and record rates of employment,
alongside under-investment in infrastructure,
the machinery specialist has warned that
fabricators and glass processors could face
spiraling labour costs, going into 2019.
Joe Hague, Managing Director, Promac
Group, said: “If you look at the economy
right now - at what’s happening in the labour
market and where we are as an industry, there
are some serious challenges on the horizon.
22 » DEC 2018 » CL EARVI E W- UK . C O M
“While some fabricators have and continue
to invest in automation of process, many
others have relied on cheap labour to grow. It
doesn’t take a genius to see that that over-
reliance, represents a significant threat to the
long term future of those business at a time
when labour is, according to official statistics,
in increasingly short in supply.”
The UK employment rate is currently at
a record high of 75.6% with 32.39million
people in work. According to the ONS, it puts
the unemployment rate at just 4.2% - down
0.4% since last year.
This has led to a squeeze on labour market
with the so-called ‘Breodus’ leading to the lowest
level of net migration in the last six-years.
The difference between the number of EU
citizens entering the UK and the number
leaving sank to 87,000 in the year to March,
its lowest level since the year to December
2012, according to ONS figures.
The according to the ONS driven by both
a decline in EU arrivals and an increase in EU
citizens emigrating from the UK and a fall in
migration from Eastern European countries
including Poland, Hungary and the Czech
Republic.
“If you’re putting on 3.1% on your wage
bill you simply cannot hope to keep a lid on
manufacturing costs”, continued Joe. “It’s
simply not sustainable – you have to take out
labour costs.”
Earlier this year the ONS reported that UK
productivity fell by 0.4% in the final quarter
of last year, continuing to lag behind rates
achieved before the 2008 economic crash and
lagging far behind that of other European
countries.
This was something highlighted in a new
report by the McKinsey Global Institute in
its report published September. This found
that with comparatively low employment costs
businesses and manufacturers have become
over-reliant on labour.
This it said, meant that the uptake of
advanced manufacturing technologies and
automation, in the UK now lagged 23%
behind that of Germany.
Promac Group supplies the UK’s most
extensive range of PVC-U, aluminium and
glass processing machinery. Representing
amongst others, Forel, FOM-GS Group,
BDM, and Urban.
“Whatever your standpoint on Brexit, we
have to make a fist of it. There is, however,
a real case now to make for investment in
automation of process”, said Joe.
“It takes out labour costs at a time when
those costs can be expected to be increase
– but it also delivers much more, driving
efficiencies, innovation and far better but also
more consistent quality, driving productivity
as a foundation for growth.
“If you have relied on labour, it’s time to act
before costs spiral.”
www.promac.co.uk