Stay calm and keep hiring
26 February 2024
How’s business? Where’s the stock market heading? And what’s the longer-term outlook?
For guidance, it’s probably best not to consult an economist: as the old joke goes, if you ask five of them a question, you’ll get ten different answers.
A week or so ago, figures showed that Gross Domestic Product (GDP) fell by 0.3% in the last three months of 2023, which is a sharper fall than economists were expecting (surprise, surprise).
This meant GDP had fallen for two consecutive quarters after a decrease of 0.1% in the three months before, and that technically means the economy fell into recession.
For the whole of 2023, the UK economy grew by 0.1%, the weakest performance since 2009, apart from the roller-coaster years during the Covid pandemic.
Should we be alarmed? Given prevailing high interest rates, rising inflation (albeit at a decreasing rate), and conflicts in the Ukraine and Middle East, there’s a strong case for uncertainty.
During a recent conversation with Neil Holloway, Managing Director of the Wilson Brook executive search consultancy, he suggested a new acronym to describe the current situation: VUCA, standing for volatile, uncertain, complex and ambiguous. And that’s a description that many would agree with.
Experiences, of course, vary. In fact, Neil told me that Wilson Brook had a record year in 2023 and the company is still very busy with many new assignments to follow.
And with recruitment still a major challenge in many industry sectors, the demand for good people isn’t going away any time soon. Neither is demand for housing, road maintenance and general infrastructure development, and the equipment needed to complete it.
Interestingly, the chief executive of Lloyds Bank said last week that he has seen the best level of business confidence at the start of a year since 2016.
Furthermore, according to Bank of England governor Andrew Bailey, when talking to MPs shortly after the GDP numbers were announced, the recession may already be over! He cited "distinct signs of an upturn" being currently visible and that interest rate reductions are a case of when, not if.
Mind you, he is an economist.
Surely the best indicator is real life experience and the recent Executive Hire Show was an ideal opportunity to take the industry’s pulse.
Many of the companies I spoke to at the exhibition were busy fielding enquiries and taking orders. And hire visitors weren’t talking of downturns or doom and gloom, they were just getting on with business. One senior hire executive told me that their figures for January were as good as those for last June, which had been very strong.
The business landscape is challenging and uncertain, and it’s true that in recent months some organisations have been streamlining and rationalising their operations. Doubtless more adjustments will follow. Others, however, see new opportunities and are expanding, and you’ll be reading more about that in future blog posts.
Another word that I’ve heard used to describe the prevailing business climate is a ‘permacrisis’, in which we encounter a series of once-in-a-lifetime events, from Covid-19 to the Ukraine conflict. Maybe that trading background has become the ‘new normal’.
However, as at any other time in business, success depends on your management skills and outlook – especially, perhaps, if you’re an economist.
Photo: AbsolutVision/Unsplash
