Despite ONS figures revealing an upward trend in food and drink employment, prospects for the labour markets are “likely to deteriorate in the medium term”, The Food and Drink Federation (FDF) has warned.
The warning comes as the Office for National Statistics (ONS) released data showing there were 19,000 more jobs in the food and drink industry in Q4 2021 compared to a year ago.
Although this is 5,000 fewer jobs than in Q3, the employment trend in the food sector is on an upward trajectory. February data revealed that job vacancies across all sectors rose to 1.3 million, with 468,000 jobs in the food sector across the UK.
However, disruptions to energy and commodity supply due to the war in Ukraine will “push up” inflation for longer and market uncertainty is set to “put the brakes on growth”.
The FDF predicts this means that “households will cut their discretionary spending” due to inflationary squeezes but also in an attempt to “increase their safety net during uncertain times”.
Additionally, pay growth is not matching the rate of inflation, with negative growth in real pay of 1.0% in January.
As a result, the FDF believes the combination of lower growth and high inflation would mean businesses are “likely to slow down” investment and hiring until they gain “more clarity about the economic outlook.”