Each year Business Link Magazine invites a select panel of the region’s business leaders offer up their thoughts and predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years. And, while none of us possess a crystal ball, it is uncanny how accurate some of these forecasts have been over the years.
Here, Carolyn Fairbairn, CBI Director-General shares her thoughts on 2017 and what lies ahead in 2018.
Certainty, predictability and calmer politics were all on our Christmas wish-list for 2017, but it was not to be. The year soon turned into a rollercoaster ride, full of jaw-dropping twists and turns from the start.
Firms have responded with resilience but there’s no doubt that the impact of uncertainty has taken its toll. While the global economy enjoyed a boom, the UK economy shifted down a gear, with 2017 GDP growth of around 1.5% compared with 2.3% in 2016.
We know from members that investment was postponed and in some cases halted. Order books for manufacturers ended the year in good shape, but inflation of 3% has bitten on living standards and affected retailers and other consumer firms.
International investors love doing business in the UK but end the year longing for greater clarity.
Thankfully the year has ended with some good Brexit news. We all breathed a sigh of relief when the EU Council in mid-December confirmed that trade talks can now begin and a status quo transition has been agreed in principle.
While Brexit is the top political and economic issue of the day, it is only part of the picture. Many of the fundamental building blocks of our economy – skills, innovation, infrastructure – are firmly within our control. And the transformational challenges of our age, such as AI, digital and low carbon, amplify the need for urgent action. Ensuring domestic priorities stay high on the Government’s agenda has been a key theme of our year.
And there has been welcome progress. The Industrial Strategy, published last month, represented ‘a decent first step, and we saw two budgets that were broadly good news for jobs and investment’.”
Looking ahead to the opportunities and challenges in 2018
Even harder work lies ahead. To keep jobs and investment in the UK, binding Brexit transition terms by the end of the first quarter need to be accompanied by progress on a framework for a final deal that delivers barrier free trade with the EU.
From our politicians we need unity, clarity and certainty, not a different opinion every day. Politics will need to work on business timescales if we are to get the right result for the country.
We should be under no illusion about the scale of heavy lifting needed in 2018. The world around us is transforming. While the UK is consumed with Brexit, China is building a global infrastructure through One Belt One Road while other nations are seizing the opportunities of the fourth industrial revolution.
The world won’t wait for Britain. We must get on, at speed and with great determination, with adapting our economy for the future.
On skills: The top priority must be the urgent transformation of our skills base. The clock may be ticking on Brexit but it is ticking just at fast in our schools, colleges, universities and workplaces.”
The UK is facing a skills emergency. Weaknesses in supporting young people into the labour market have existed for years, but the changing nature of jobs and skill needs have turned the situation critical.
The CBI will be campaigning for reformed careers advice in schools and to ensure every young person gets quality guidance and at least 4 interactions with working life by the age of 16, in every nation of the UK.
We will also champion the effective delivery of higher quality technical education, including T-Levels in England, a reformed apprenticeship levy and real progress on mass adult reskilling.”
On innovation: In parallel, we need more practical action to support innovation in 2018. We will work with businesses and universities to improve the UK’s approach to commercialising the leading-edge research we deliver so successfully.
At the same time, action is needed to ensure companies adopt tried and tested technologies that will move the dial on productivity. You can expect a drumbeat of activity from the CBI on innovation throughout 2018.”
On infrastructure: Meanwhile planned infrastructure projects must be delivered on time and efficiently throughout the year. Making progress on the big projects is essential – Heathrow, Hinkley and High Speed Rail. We will keep up the pressure, but local delivery aligned to regional economic plans is equally important. The pipeline is there – now the taps need switching on.
But one thing is sure – business has a vital role to play in building a bright future for our country. The CBI and the thousands of firms we represent look forward to working in close partnership with a united government to improve lives for everyone in 2018.”