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Wage Increases And Under investment In Automation A ‘Ticking Time Bomb’

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, combined with a significant fall in net migration and record rates of employment, alongside under-investment in infrastructure, machinery specialist has warned fabricators and glass processors could face spiraling labour costs, going into 2019.
Joe Hague, MD, Promac Group, said: “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 businesses at a time when labour is, according to official statistics, is increasingly short in supply.” 
The UK employment rate is currently at a record high of 75.6% with 32.39 million at work. ONS states, 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. 
“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.”
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. 
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