Two FTSE 100 firms are defying the gloomy predictions for Britain’s economy and commercial property businesses by expanding and creating employment in a country desperate for more jobs.
BT, one of Europe’s largest telecommunications companies, will recruit 2,000 engineers and call centre staff later this year, with the hiring process said to be beginning sometime in the next few months. This is, in large part, to aid the installation of superfast broadband throughout the UK, which will benefit households and commercial property businesses by speeding up internet download times and making high speed broadband accessible for more people across the UK.
Meanwhile Centrica, which is the parent company of British Gas, will be taking on huge numbers of staff in order to take advantage of changes in taxation law. The commercial property company is said to be recruiting in the region of 4,000 new members of staff, due to a new tax allowance for shallow water gas fields.
Economists are baffled by these mass hiring drives, given the current state of the economy. Figures released this week show that, for the third consecutive quarter, Britain’s economy suffered a decline, this one said to be the worst performance since the height of the recession in 2009.
Unfortunately, this means that commercial property businesses are struggling to keep their heads above water in what is now officially the longest double dip recession in modern history. Although the Eurozone plays a significant part in the issues faced by British commercial property businesses, due to the exchange rate and the impact on trans-European trading, further problems are created internally due to the fact that many wages have been frozen, or have increased less than inflation.
In other words, households have less disposable income per head as the recession deepens, and so have less to spend in commercial property shops and leisure facilities.
This creates a vicious circle in a way, as without consumers channelling cash flow into commercial property businesses, they are less able to expand and take on more staff, creating a stagnant economy with little economic turnover. Lack of expansion means lowered capability to hire new employees, creating the type of unemployment issues we now see, further lowering the average household disposable income.
Yet economists are quick to point out the discrepancies between the poor performance of the GDP and the fact that large commercial property companies have started mass hiring drives.
Chief economist at financial data company Markit, Chris Williamson, says; “We can think of no reason why companies would be taking on staff at such an impressive rate if the economy really was collapsing to the extent that the GDP numbers suggest.”
With unemployment figures falling again in the three months to May, it seems to suggest that Britain’s economy should be improving. Commercial properties are pumping cash flow into the economy by continuing to hire new employees and, on top of that, the CBI revealed that factory orders in July were stronger than expected.
In that case, the question must be asked – why is Britain’s economy falling further and further into recession as the annual quarter’s progress? With controversy surrounding price fixing and market rigging in so many companies at the moment, it can only be a matter of time before suspicion that the GDP figures are not all that they seem sets in amongst the taxpayers of the UK.
Do you believe that commercial property companies can help boost the economy by hiring? In your opinion, is there more than meets the eye in the latest news about the recession?
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