Tue 14th May 2024 - Sector wages rose by year-on-year average of 7.9% but increases helps bring vacancies down Sector wages rose by year-on-year average of 7.9% but increases helps bring vacancies down: Sector wages rose by a year-on-year average of 7.9% between February 2023 and February 2024 but these increases have helped bring vacancies down, CGA by NIQ’s latest Business Confidence Survey reveals. The survey shows business confidence has been weakened by pressure on wage costs, and nearly all leaders polled said these had significantly (73%) or slightly (24%) increased over the last 12 months. Wages rose by an average of 7.9% between February 2023 and February 2024, and by a further 8.9% in April following increases to the national living wage. However, higher pay has helped to cut vacancies, with only 6% of roles now open, down from 10% in February. The number of leaders reporting decreases in energy costs has also more than quadrupled quarter-on-quarter, from 9% to 38%, while those facing significant increases in food and drink costs have fallen from 50% to 31%. Half (51%) of leaders said they plan to increase investment over the next year, more than double the number (20%) who will reduce it. Two thirds (65%) of leaders said revenue in the first quarter of 2024 was higher than in the first three months of 2023, while only 14% said it was lower. Well over a third (39%) said consumers’ average spend per visit has increased over the last six months, though only a quarter (24%) report growth in footfall and two thirds (66%) report consumers cutting back on the number of drinks they order while out. However, the poll shows only 34% of leaders feel confident about prospects for the hospitality market over the next 12 months, down by seven percentage points from February’s figure of 41%. The proportion who feel optimistic about prospects for their own business in the next year has also fallen by four percentage points, from 57% in February to 53%. It is the second quarter-on-quarter drop in leaders’ confidence in a row, following four successive quarters of growth. Karl Chessell, CGA by NIQ’s director, said: “While confidence levels in hospitality have fallen slightly since strong Christmas trading, it’s encouraging to see that revenue, consumer spending and some cost pressures are generally moving in the right directions. Increasing investment is another welcome sign that leaders are upbeat about long-term prospects in hospitality. Costs remain very high in key inputs like pay, and there is some way to go before people’s spending confidence is back to pre-covid levels. But these figures give us cause for cautious optimism that trading will continue to pick up over the rest of 2024.”