Declining demand tops all other concerns for UK plc…
Key challenge/threat to industry growth & development
When Matchtech recently asked its STEM professional network what it believed was the greatest threat or challenge to future growth and development within their current industry, the standout response – as cited by 37% of our c.2,200 survey respondents - was that the continuing challenging economic outlook was perceived to be the most damaging issue.
…perceive the continuing challenging economic outlook to be the most damaging issue
The key challenges/threats to industry growth & development
Administration & Support Services
Manufacturing
… and by industry?
Additionally, STEM professionals in all fields see this as the main challenge or threat. Concerns are especially high in Administration & Support Services (49%) and Manufacturing (44%).
… other industries
It appears that UK plc agrees!
When asked by the Office for National Statistics, as part of its Pulse survey, what the key business concerns were for April, falling demand outstripped all other concerns.
And this concern has been trending upwards since May 2023.
Main concern across all UK businesses: falling demand of goods and services
Source: Matchtech analysis of ONS data
Main business concern for April 2024
20% Falling demand of goods and services
10% Taxation
8% Inflation of goods and services prices
8% Competition
6% Energy prices
4% Business rates
3% Interest rates
1% Supply chain disruption
Information & Communication 10% to 21%
Professional, Scientific & Technical 11% to 21%
Construction 10% to 22%
Manufacturing 12% to 20%
At a key STEM sectoral level…
Whilst the trend line on concern over falling demand in the upcoming month was similarly upwards year-on-year in the following sectors:
Information & Communication (10% April 2023 to 21% April 2024)
Professional, Scientific & Technical (11% April 2023 to 21% April 2024)
Construction (10% April 2023 to 22% April 2024)
Manufacturing appears to have peaked (12% April 2023 to 20% April 2024, but notably down from a near-term peak of 27% in December 2023).
Actual domestic and international demand
When looking at whether the issue is a drop in domestic or international demand, the data up to January 2024 shows a clear picture. Domestic demand saw a significant decline, with 9% more companies reporting a decrease than an increase. International demand also dropped but was less severe, with 3% more companies experiencing a decrease than an increase.
All businesses: actual domestic and international demand trend
Domestic fall in demand
International fall in demand
Confidence index
… are 'very confident' across all relevant trends
Investment index
… are increasing investment across all fields
Biggest external trends for 2024
Moreover, a new report from Mazars, based on input from 800 C-suite executives from across the world, reinforces the sentiment of both STEM professionals and UK business leaders that economic trends present the greatest challenges – and are anticipated to continue to do so throughout 2024.
Source: Mazars, Building global ambition - C-suite barometer, outlook 2024
That said, the same report also notes that – after what was clearly a very challenging 2023 - an increasing proportion of global C-suite are confident that that they are on top of all relevant trends and there is an uptick in the proportion (two-thirds) who are increasing investments across all fields.
Top ten areas of investment
In terms of what they are increasingly making investment in, whilst there an emphasis on sales and business development initiatives, the sourcing of new talent is within their top 10.
In addition to being cited by a notable 68% of enterprises, this was 3 percentage points higher than in 2023.
Seasonally adjusted vacancy numbers
And in terms of how this demand-related sentiment and actuality is translating into UK job opportunities, the 21 consecutive rolling quarters of decline in official UK vacancy numbers through to December-February 2024 are well-documented. There was, however, a marginal (6k) seasonally adjusted increase in January-March 2024.
Source: Matchtech analysis of ONS data
And when looking at annualised job-change run-rates amongst key visible UK-based STEM occupations, whilst all rates are down YoY, there was a marginal uptick in April, based on activity in the preceding 90 days.
Source: Matchtech analysis of LinkedIn data
IT professionals annualised job-change run-rate
based on 90 days to mid April 2024
April 2023 13%
January 2024 10%
April 2024 11%
Engineering professionals annualised job-change run-rate
based on 90 days to mid April 2024
April 2023 13%
January 2024 11%
April 2024 11%
Our recommendation
Whilst there are no clear labour market indicators to suggest that there will be any meaningful reversal of recent negative trends anytime soon, there is a suggestion from businesses themselves that they are not just braced ready for an upturn but are preparing to capitalise upon everything within their powers to improve their own situation.
And confidence breeds confidence. Once STEM professionals sense an improvement in business confidence, they will be more prepared to move to support these business initiatives. As such, organisations need to prepare for a far more competitive recruitment market than they have witnessed of late.
Crucial to successfully competing in that race is a relevant value proposition for these new times and a preparedness to collaborate with all those within the talent supply chain with established people networks – notably to provide a steer on candidate sentiment.
Actual domestic and international demand
When looking at whether the issue is a drop in domestic or international demand, the data up to January 2024 shows a clear picture. Domestic demand saw a significant decline, with 9% more companies reporting a decrease than an increase. International demand also dropped but was less severe, with 3% more companies experiencing a decrease than an increase.
All businesses: actual domestic demand trend
Domestic fall in demand
International fall in demand
All businesses: actual international demand trend
Top ten areas of investment
In terms of what they are increasingly making investment in, whilst there an emphasis on sales and business development initiatives, the sourcing of new talent is within their top 10. In addition to being cited by a notable 68% of enterprises, this was 3 percentage points higher than in 2023.