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Unemployment increase slows

Unemployment has risen by 28,000 to 2.67 million in the last quarter, the Office for National Statistics.

29.12 million people were in employment aged 16 and over, up 9000 on the quarter, however the unemployment rate represented 8.4% of the economically active population.

Average earning increased by 1.4% in the year to January, and were down 0.5% on the three months to December 2011.

Neil Carberry, CBI Director for Employment policy, said: “While unemployment has risen again, thankfully the pace of increase has continued to slow, as we have seen in previous months.

“Overall employment remained broadly flat over the past three months, but it’s encouraging that private sector jobs rose in the last quarter of 2011. During that period, private sector jobs more than compensated for the losses in the public sector.

“Growth in private sector jobs has also been driven by rising numbers of employees, rather than the self-employed, which suggests that firms are beginning to feel more confident about taking on new staff.

Analysis from IPPR shows that two thirds of the rise in unemployment over the last quarter has hit women, with 22,400 more women out of work and 5,200 more men.

More than a million women are now unemployed, presenting a rise of 85,000 over the last year.

The North East continued to top the unemployment tables at 10.8%, despite reducing the number out of work by 11,000.

In the North West unemployment rose by 16,000 to 9.3%, and in the South East numbers rose by 14,000 to 6.5%.

Ed Cox, IPPR North Director, said: “When it announced cuts to public spending, the Government said it expected the private sector to fill the gap left when public demand was withdrawn from the economy.

“Today’s figures show this is not happening. As a consequence, unemployment in the North and among women is rising sharply.

“Evidence from surveys conducted in the second half of 2011 suggests many companies responded to last year’s downturn in demand by cutting back on recruitment.

“Contrary to the Government’s hopes, the tough fiscal stance has not led to a resurgence of activity in the private sector.

“On the contrary, companies have responded to talk of austerity by becoming more cautious and increasing employment at a slower pace. We need Government investment in infrastructure in the north to kick start growth across the country.”

Graeme Leach, chief economist at the Institute of Directors, remarked the figures were a mix of “the good, the bad and the ugly.”

He said: “The good is the nine thousand increase in total employment. The bad is the 50 thousand fall in full-time employment and the rise in both measures of unemployment.

“Without doubt the ugly is the fall in wage growth to 1 per cent, which means real pay is still falling sharply.”

Some recruiters were suggesting the figures should not dishearten jobseekers, as there are still firms looking to fill skilled roles.

Andy Dallas, associate director of recruiter Rober Half UK, said: “Interestingly, these figures don’t tell the whole story. Despite the slight rise in the overall unemployment figure, there are numerous companies who are still looking to fill much needed roles, particularly in professional occupations.

“This is partly evidenced in the fact that there were 45,000 more people employed in the private sector in the last three months.

“However, despite continued uncertainly within the general UK jobs market, many businesses report challenges in finding and retaining skilled professionals who can help them grow through a volatile environment.

“Candidates who have developed a ‘specialism’ are finding it much easier to get placement. In many cases we are seeing a reliance on specialised temporary and interim professionals to support key initiatives when a permanent hire cannot be made.”

Carmen Watson, managing director of Pertemps Network Group said it was encouraging to see the rate of unemployment slowing.

She added: “For the jobs market to fully turn a corner it doesn’t just need the participation of companies in government backed schemes, it also needs the confidence of employers from the various business sectors.

“We are frequently speaking to companies who are seeking to strengthen their workforce and increase productivity by taking on new staff on a temporary or permanent basis.

“This attitude has to reverberate throughout UK industry but it has to be based on confidence in future prospects.

“Recovery in the economy is within reach but its perceived proximity will be the deciding factor for many employers with regards to recruitment strategy.”

This was posted in Bdaily's Members' News section by Tom Keighley .