The UK jobs market remained stable in the run up to last week’s election, official figures have shown, but experts warn the labour market could become ever tighter.
Figures from the Office for National Statistics (ONS) show employment reached 76.2 per cent in the three months to October – a record high. This was, however, only a slight increase of 0.4 per cent compared to the same quarter last year.
The number of job vacancies in the economy fell to 794,00, 20,000 fewer than the previous quarter and 59,000 lower than the same quarter last year. And unemployment was just 3.8 per cent – 0.3 per cent lower than the same quarter last year.
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Gerwyn Davies, senior labour market adviser for the CIPD, warned that although job creation in many sectors had significantly slowed following a period of sharp growth, employers still faced a war for talent and skills. “Despite the recent slowdown, the jobs market remains tight,” he said.
“Growth has slowed to a trickle in many sectors apart from health and public administration, which continues to see relatively strong growth. In contrast, employment levels are continuing to fall in some consumer-facing sectors such as construction and retail.”
He added that it was “imperative” any post-Brexit immigration policy did not impose unreasonable restrictions on employers. “In particular, it’s essential that the introduction of an Australian-style points-based system prioritises employers’ skills and labour needs,” said Davies.
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Neil Carberry, CEO at the Recruitment & Employment Confederation, said the results showed uncertainty before the election had taken its toll – noting that this was the tenth successive month of falling vacancies.
But Carberry highlighted that the situation could be slightly different again now the election has taken place. “A lot has changed since this data was collected. It remains to be seen if the clarity the election result has delivered will translate into businesses launching the ambitious hiring plans they have been cautiously putting on hold,” he said.
“The biggest challenge to growth is continuing skills shortages. Productivity hinges on the government’s ability to address this.”
These latest ONS figures also found growth in pay slowed in August to October, from 3.9 per cent in May to July – the highest growth rate since 2008 – to 3.2 per cent.
The figures also showed the average regular weekly pay before tax in Britain was £510. When adjusted for inflation, this was £1 a week less (0.2 per cent) than the UK’s pre-recession peak in April 2008.
Nye Cominetti, economic analyst at the Resolution Foundation, said the decrease in unemployment was welcome news, but sounded a note of caution around pay.
“The UK’s slowing economy has started to hit workers’ pay, reminding us that the labour market cannot be divorced from wider developments,” he said. “Remarkably, British workers are reaching the end of the decade with their pay packets stretching no further than they did at the end of the last decade.”