It’s been another tumultuous year on the global stage with continued geopolitical tensions, the ongoing threat of conflict in Ukraine and the Middle East spilling over, half the world going to the polls and the looming threat of recession. On the bright side, inflation appears to be under control after two years of peaking in double figures.
But what can we expect for Q4 2024 and how will it all impact company investment appetite and demand for executive skillsets? Below, we take a look at the indexes and indicators.
The UK and the US find themselves on either side of their respective national elections, with economies on both sides of the Atlantic partially paralysed by a wait-and-see approach.
In the UK, the expected Labour Party landslide majority has seen a shift in hiring in different sectors as some, including technology, construction and renewable energy, anticipate a boost in line with policy priorities.
However, economists have called on Chancellor Rachel Reeves to tone down the gloomy messages around tough times ahead to fill that £22bn blackhole, warning they could become a self-fulfilling prophecy. The GFK’s confidence index, which measures UK consumer sentiment, was down 7% to -20% in September 2024, raising the spectre of a potential knock-on effect of consumers holding onto their savings and reducing consumer flow into the economy.
Already, the brief economic bump of Q3, when the UK saw 0.5% growth, is expected to tail off with 0.2% growth in Q4.
Meanwhile government borrowing matched the highest in any August outside the pandemic, which does not bode well for a loosening of the Treasury purse strings any time soon. With public sector pay rises and an increase in the Living Wage, lower earners will have more spending power, however employers may feel the pressure on having to pay the higher wages with the biggest impact on services, healthcare and retail industries.
The Chancellor’s package, to be announced on October 30, will be watched eagerly by business leaders for a clearer indication of potential areas and stimuli for growth and risks/challenges ahead.
Speaking in her first Conference speech as Chancellor, Rachel Reeves didn’t give much away but did strike a more optimistic tone, ruling out a return to austerity, any income tax or corporate tax rises and reinforcing that she would stick to manifesto promises, boost investment in the regions, launch a new industrial strategy in October and host a major global investment summit to send out the message that “Britain is open for business”.
“Growth is the challenge and investment is the solution,” she told delegates, raising hopes of changes to the debt rules to enable more public investment in capital schemes such as schools, hospitals and infrastructure.
Recent figures show the UK has the lowest investment as a proportion of GDP in the G7 while imports and exports are suffering still in the wake of Brexit, which has impacts several sectors including manufacturing and transport and logistics. Retail is the one bright spot. The new government is seeking to build stronger trade agreements, repair relations with the EU, encourage greater investment in British industry through pensions and attract international investment, especially into the green economy, technology and infrastructure.
Ben Jones, CBI Lead Economist said: “By doubling down on the recently announced planning reforms, introducing a Net Zero Investment Plan and implementing a clearer, fairer and more competitive business rates system, government has an opportunity to supercharge investment and UK growth over the next Budget period and beyond.”
Globally, India and Japan have seen growth and the US appears to have avoided a feared recession with recent payroll growth, rising household income, falling inflation and an anticipated programme of rate cuts offering potential stimulus of future growth which started with a surprise 0.5% cut in September, potentially easing the brakes on the engine house of the global economy.
However, the outcome of the US General Election in November and inauguration in January 2025 – after the policy shutdown of the two-month transition period – will reshuffle the deck and help determine different winners and losers. If Trump wins, expect aggressive trade wars which could have a particularly harsh impact on struggling China. A Harris victory could see a drag on policy with a divided Congress but a boost for renewables, lower unemployment, lower budget deficits and average historical 1.2% higher economic growth than under the Republicans.
KPMG’s latest CEO survey found company leaders confident about prospects for growth but feeling the pressure to deliver in challenging circumstances.
In the UK, most say they have already adapted their growth strategies to account for increased AI-driven transformation. They view cyber security and supply chain issues the biggest threats to growth, a reverse of the wider global response.
There appear to be mixed messages on hiring as we go into Q4, reflecting hesitancy as employers await clearer signs of which way the UK and world economies are headed, plus growth in some sectors and stagnation or contraction in others.
The general picture appears to be that employers want to hire, know they need to hire, but are being restrained by a number of factors include wage pressures, uncertainty over interest rates – held again in September – economic inactivity and skills shortages.
Jon Holt, chief executive and senior partner of KPMG in the UK, said: “Recent government warnings that the UK’s economy may weaken further before improving add to the overall sense of uncertainty, affecting recruitment plans.”
The Recruitment and Employment Confederation (REC) recently reported permanent positions were still heading downwards and redundancy volumes up over summer while BDO said hiring in August overall was the worst month in a decade.
This is backed up by latest ONS labour market figures which show that in Q3, the estimated UK vacancies fell by 42,000 on the quarter to 857,000, the 26th consecutive quarterly drop.
However, there is hope for a pickup on the horizon, at least in some sectors.
Lloyds Bank UK Sector Tracker said 10 of the 14 sectors it monitors had increased their headcounts, month on month, with more hiring than at any time in the past 16 months. And global recruitment firm Manpower Group reports an increase in UK employer hiring confidence.
Manpower’s survey found estate agents were being hired fastest indicating a pickup in the property market which could be a positive signal for construction and related industries, especially with the government’s determination to press on with a mass housebuilding programme. This was followed by financial services, software services and technology equipment manufacturers.
When looking at intent to hire, UK net employment outlook, confidence was healthiest in information and technology, at 48%, industrials and materials, 32%, and financials and real estate plus health care and life sciences on an equal footing at 29%
There’s been quite a change on the third quarter, reflecting the priorities of the new government perhaps.
Information technology was at 29% just months ago, energy & utilities grew from -12% to +27% and Transport and Logistics was up by 24% over the quarter
Unsurprisingly, demand for hiring at c-suite level was lowest, according to Manpower, at 4% in a multiple choice survey, with senior management at 16%. So, employers are fired up and ready to recruit strategically to power up their Gen-AI driven growth strategies. But some may sit tight a little longer while others press ahead and risk delayed ROI to get ahead.
The Manpower survey found IT & Data the most in demand hard skills with collaboration and teamwork, reasoning and problem solving and resilience and adaptability the most sought after soft skills.
Globally, the picture appears to be a little less competitive, with a similar focus on the same areas of growth, largely around AI and other technologies.
92% of international CEOs said they planned to increase their headcount, but also emphasise the need to upskill their people and work hard to bring in the best talent in the most undersupplied functions, again, especially focussed on technology.
According to Manpower’s poll of more than 40,000 employers in 42 countries the global hiring outlook for Q4 2024 was slightly higher on Q3 but down 5% on the year. Strongest hiring was seen in India, Costa Rica and the US.
Executives looking for new positions may therefore wish to target growth sectors, specifically dynamic companies within those sectors. This may mean needing to repivot or reskill and refocus CVs and applications around the most in demand hard and soft skills to compete in the extremely challenging market.
Rialto can provide structured, professional support to help you understand current global, regional or UK trends and developments in the executive job market, benchmark and understand the skills you need to develop to ensure your brand and profile are strategically positioned to attract the right opportunities and make progress.
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