UK Unemployment statistics, July 2010

Wednesday, August 11th, 2010 - economics, employment

UK Unemployment statistics, July 2010

This morning, two things occurred which are of significance to the UK’s employment market:

• The Bank of England quarterly economic report
• The Office of National Statistics unemployment report for July 2010

First the good news: the recovery continues, and employment is up. But again, its due mainly due to workers taking part-time over full time positions.

Now the bad news: recovery is pretty flat, below target, and we still have to face large public sector cut backs from October 2010 (hence why we as an organisation didn’t buy a teacher recruitment company last quarter).

The problem is the debt factor. Firstly, consumers have eased their spending in the second half of the year – high street spending is down. Secondly where the public has spare cash, it is spending it on paying down debt over spending. Thirdly, the banks are still being tight over debt-fuelled growth – they are PRing this as “we (the country) don’t want debt fuelled growth again, do we?” Fourthly the government has its own debt headache, and the coalition has stated its priorities again and again that paying down the debt is its number one priority. Against the economic inputs pre-2008, this is a drop in economic activity, and resultantly jobs. Also, when you consider that the Government during the down turn was creating more jobs than the private sector was losing, that’s now about to come to a complete halt.

There is some good news. Exports are up due to the low value of the pound, but that’s starting to rise mainly thanks to the weakness of the dollar – although the Fed’s “light QE” policy reversed the recent gains. Additionally recruiting in some sectors is starting to pull upwards – IT is one positive area, particularly in interim and contract positions.

So what’s the outlook? Economically poor (read flat), but Mervyn King suggest that the chance of a double-dip recession are now reduced, and most commentators although thinking his is optimistic overall, agree with that conclusion “reduce chance of double-dip” at present. The outlook for jobs is not so bright. The government has been the main driver for the past 24months, and that’s going into reversal, with huge 20%+ cuts in most departments – the unions are getting nervous, Whitehall has started leaking memo’s. Further, universities are having their funds cut-back, and can’t take up the fill level that they could when many in 2008/9 switched to a further education career choice.

I don’t see a jobs recovery until late 2011, early 2012, with recovery in part driven by the Olympics and its British-centric legacy. It is going to be a tough 24months on the jobs market.

Good Luck!

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