Brexit Britain set to lose EU builders

A campaigner holds fake £350 million notes featuring the face of Britain’s Foreign Secretary Boris Johnson as EU advocates launch the Brexit Facts Bus and kick off a new initiative against Brexit. Recruitment firm Hays expects that the UK’s departure from Europe will encourage builders from EU countries to leave. (AFP)
Updated 22 February 2018
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Brexit Britain set to lose EU builders

LONDON: British construction sites are starting to see a labor shortage as Eastern Europeans, who have traditionally filled the bulk of on-site jobs, have stopped taking positions after Britain’s decision to leave the EU, recruiter Hays said.
CEO Alistair Cox said there was “less appetite” for non-British workers to take jobs following the Brexit vote and some European Union citizens had quit jobs in Britain, with the immediate impact being felt on construction sites.
“We are starting to see skill shortages in a number of areas there because of a lot of the traditional supply, much of which has come from Europe has dried up,” he told Reuters.
Cox’s comments are the first indication that firms may struggle to fill jobs after Brexit. So far, staffing companies had said employers in Britain had frozen new job investments and were only hiring replacements for jobs being vacated.
The concern remains that Brexit could cause a mass-exodus of jobs to other countries with large European agencies vacating their British headquarters and financial companies detailing plans to transfer jobs to keep servicing EU clients.
Finance firms had begun moving “some small areas of the business” with “relatively insignificant numbers” of jobs to other European countries, Cox said, declining to name the companies or the functions of jobs moved.
But he said there had not been any moves of larger departments or “hundreds or thousands” of jobs and said finance firms were not only hiring replacements for those leaving but also making fresh hires for risk, compliance and audit.
Hays said the wider British market, which along with Ireland accounts for about a quarter of the group’s net fees, remained subdued but stable. Cox also said that wage inflation remained subdued at about 2 to 2.5 percent a year.
Profit from Britain and Ireland rose 24 percent to £22.6 million in the six months ending Dec. 31, helped by cost controls. Like-for-like net fees grew 1 percent.
This improvement and international growth pushed Hays’ profit up 16 percent to £116.5 million ($161.7 million) beating consensus of £115.6 million.
Three analysts said they expected full-year profit consensus of £239.8 million to rise by low single digits, but Hays’ shares, up about 12 percent this year, fell 5 percent at 194 pence in early trade, a steeper fall than the midcap index.
“Shares have been strong coming into the earnings and probably are already pricing in the upgrades,” Morgan Stanley analysts wrote.


Stronger US dollar unlikely to derail bullish view on commodities — Goldman Sachs

Updated 21 September 2018
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Stronger US dollar unlikely to derail bullish view on commodities — Goldman Sachs

  • The dollar has been lifted by a stronger-than-expected US economy, the world’s largest
  • A stronger greenback makes the purchase of dollar-denominated international commodities more expensive for holders of other currencies

BENGALURU: Goldman Sachs said a stronger dollar is unlikely to derail its bullish view on commodities, which are likely to find support from physical shortages.
The dollar has been lifted by a stronger-than-expected US economy, the world’s largest, and that’s a positive sign for global growth, the US investment bank said.
The US dollar index has lost more than 1 percent this week, but this follows months of strong demand over US-China trade-related tensions, as investors bet the greenback would gain at the expense of riskier currencies.
“The risk aversion this summer created significant emerging market destocking, particularly in China, as consumers attempted to avoid a strong dollar and tariffs by liquidating inventories,” Goldman said in a note dated on Thursday.
A stronger greenback makes the purchase of dollar-denominated international commodities more expensive for holders of other currencies, making buyers and users more likely to draw on any stored materials in preference to imports.
“This liquidation, however, has a physical limit with Chinese destocking having already created significant increases in physical (premiums) for oil and metals – a sign of physical shortages.”
Going forward, oil had a strong fundamental outlook helped by US demand growth, supply losses and disruptions, and still constrained US shale output, Goldman said.
The bank said its near-term Brent crude oil price target remained at $80 a barrel.
The bank said it was moderating its bullish view for gold due to a sell-off in emerging markets, and it lowered its 12-month price forecast for the metal to $1,325 per ounce, down from $1,450 an ounce earlier.