News analysis: jobs market – March 2013
The number-crunchers have just come up with another depressing statistic. According to the Jobs Economist consultancy, a numbing 3.5 million people have been made redundant in the UK since this recession started. But, before we hit the communal Prozac, it is worth looking at those figures in context.
For a start, there’s the general consensus among economists that this downturn has seen fewer redundancies than might have been expected. Recent ONS reports show that in the three months to December 2012, unemployment numbers fell by 14,000 to 2.5 million people, meaning the number of people in work increased to 29.73 million.
The bigger picture
Certainly, on the face of it, unemployment has been consistently lower than the two previous recessions when it hit a rate of 11.9% in 1984 and 10.7% in 1993. With regard to this downturn, it’s now at 7.8%, having reached its peak of 8.3% at the end of 2011, though it still has a way to fall to match the jobless rate of 5.6% when the global crisis hit in 2008.
A report in The Spectator puts an interesting slant on the figures. Using Labour Market Statistics, it calculates that that 1,400 jobs were lost in 2012 a day, but 1,900 new ones were created. It also claims that before the recession there were about 1,500 redundancies a day.
So what’s going on? Well, there is evidence that employment is shifting, with private sector job growth weighing in against public sector cuts. So, while the Government is likely to have slashed at least a million public sector jobs by 2017, it also claims – though some contend it – that a million jobs have been created in the private sector since the election. There’s also the factor of stagnant wages, which reduce the need for redundancies, and the emergence of so-called zombie companies that would otherwise have crashed but have survived on the low interest rates set in 2009.
And although it’s of little comfort to the unemployed, some doors have closed but others have opened. As an example, while Honda slashed 800 jobs at its Swindon factory in January, Jaguar announced the creation of 800 new jobs at its Solihull factory.
Most industries have seen job-losses over the past five years with construction, manufacturing and retail particularly badly hit. But, while some sectors are suffering, others are seeing an increase in job opportunities. For instance, major City banks have been culling jobs in their hundreds, but a report from the City of London Corporation and Oxford Economics reveals that the number of people working in professional services in the City, such as law firms and accountants have risen by 7.2% to 99,200, with financial services roles climbing 1.8% to 158,600. Similarly, as parts of the financial services industry contract, others such as insurance and fund management are expanding.
Across the UK, other industries expected to see an increase in job opportunities include IT and electronics where high-tech expertise is being used to drive productivity across many unrelated industries, as well as jobs related to scientific advance and biotechnology. And as the population ages, there is speculation that there will be increasing demand for healthcare and care workers – and financial advisors.
The shape of the workforce is changing, too. The TUC claims that the rising number of people in work since 2008 is partly due to a 9% increase in the number of self-employed workers, set against a fall in employees of 1%. It points out that since 2010, 40% of the new jobs created have been self-employment roles. The largest increases have been in secretarial and administrative work, which rose 52%, sales and customer service roles at 32%, and personal service occupations such as hairdressing, cleaning and care work at 31%.
Positive changes in the jobs market
You can break down the numbers in many ways, but the bottom line is that according to Labour Market Statistics the number of people working full-time is increasing. Between October to December 2011 and the same period in 2012, there was a 394,000 rise in the number of people working full-time which is the largest annual increase since 2005. There was also an increase of 190,000 in the number of people working part-time.
With that said, full-time employment still has a way to go. From October to December 2012, full-time employment was 378,000 lower than at the start of recession in April to June 2008. And some people have been hit worse than others. Despite the fact that in January we heard that the number of those claiming jobseeker’s allowance fell 12,500 to 1.54 million, it continues to be desperately awful for 16-24 year olds, with a million looking for work – projecting an unemployment rate for them of 20.8%.
On the bright side, then, it looks as if the jobs market will continue to offer opportunities for those who have been made redundant but can transfer their skills. The Office for Budget Responsibility has warned that the UK’s general unemployment rate is expected to increase slightly over the coming year, peaking at 8.3% at the end of 2013. The good news, however, is that it will recover gradually from 2014, sinking to 6.9% at the end of 2017.