Is Brexit the new millennium bug?
The talk is all about Brexit but anyone born before 1982 will remember the world worrying about the Millennium Bug
The Millennium Bug described a theoretical problem caused by the switch from 1999 to 2000 on computer processing units. There was much fear that computers around the world could not cope with the change of year and that we’d all be without essential services for an extended time while it was sorted out.
John Hamre, then US Deputy Secretary of Defence warned that “the Y2K problem is the electronic equivalent of the El Niño and there will be nasty surprises around the globe”.
In the end, nothing of any significance happened.
Since the historic vote in June 2016 to leave the European Union, there have been many predictions of economic disaster that will befall the UK. During the referendum campaign, there were predictions of emergency budgets, an irreversible decline in society at large, and even the outbreak of a third World War.
Brexit has not happened yet. At time of writing, the UK is due to exit the EU on the 29th March 2019. One stage of long and protracted negotiations are out of the way, soon to be followed by more on the nature of the trading agreement post-Brexit.
Whilst Maxwell Stephens takes no particular position on the rights and wrongs of Brexit, we’re a business and we take an interest in the wider economic health of the country. So, what are the economic indicators presaging and what are our own experiences as a business?
Employment is at record highs
Across the recruitment sector, hiring intentions registered as part of standard sales and marketing canvassing activities show no drop at all – in fact, the opposite.
Employment in the UK has never been higher.
There have been plenty of warnings from the chief executives of national and international banks about moving their operations and a large proportion of their staffing overseas. Whilst this might be what they are saying, this is not what they are doing.
Governments of EU countries were recently involved in an auction to buy the C2C rail franchise from UK-owned National Express. The Italian state railway outbid the Dutch national railway. Leaders of EU country governments are threatening a terrible time for the British economy while at the same time their wholly-owned companies are making significant investments in the UK infrastructure.
Facebook and Google have announced large and long-term investments in their UK operations. Again, another sign of confidence.
Inflation and slower economic growth
Inflation is high. Growth predictions have been downgraded from previous forecasts prior to the vote to leave the European Union.
Inflation peaked at 5% following the economic crash of ten years ago and came back down quickly. Will this mean a rise in interest rates? Perhaps but most likely not.
Wages have lagged behind inflation for a number of years creating a squeeze on household finances. Any rise in interest rates would have a significant effect on demand within the economy almost straight away meaning that inflation will fall rapidly within a short timeframe.
We may be more than half way through the inflationary disruption caused by the drop in the value of sterling.
Dire predictions are not being borne out in real life
What about the facilities management job market?
The first quarter of 2017 saw a record number of placements for Maxwell Stephens in our now 12-year history. Other than the odd expected seasonal fluctuation, it was a great year for the company.
There has been no let-up in the first few days of 2018 both for advertised jobs and off-the-market jobs we’re being asked to fill.