"Every little win counts": Business leaders react to fall in UK unemployment figures
Unemployment has shown signs of starting to fall in the UK according to new figures.
Today the Office for National Statistics (ONS) published its labour market report for the three months up to February 2021, showing a 0.1 per cent decrease in unemployment on the previous period.
Since February 2020, the number of payroll employees has fallen by 693,000, with data that under 25s contributed over 60 per cent of the fall.
Business leaders and economists across the country have reacted to the news and what it potentially means for the recovery of the economy following COVID-19.
Suren Thiru, head of economics at BCC
“While unemployment rose slightly, the continued uptick in the timelier payroll employment data indicates that the UK jobs market is becoming more resilient.
“Ongoing wage support, greater clarity provided by the government’s roadmap and the adaptations made by some firms to operate under lockdown restrictions helped support higher payroll employment in February.
“Extending furlough will limit the peak in job losses. However, with many firms struggling with the damage done to their cashflow by a year of covid restrictions, unemployment is likely to remain on an upward trajectory until well beyond a full reopening of the economy.
“While the extension to the job support schemes will protect millions of jobs and livelihoods, it is vital that those businesses and individuals who remain excluded from government support get the assistance they need to navigate a difficult period.”
Niamh Corcoran, policy adviser at North East England Chamber of Commerce
“Figures released today suggest that the labour market is beginning to stabilise. The extension of business support and the clearer picture of the route out of restrictions is likely to be bolstering business confidence.
“However, the government’s Job Retention Scheme is very likely to be distorting these figures. The scheme is supporting businesses and employees through the current lockdown and successfully preventing redundancies. What remains uncertain is how many jobs will be lost as the furlough scheme is wound down in the Autumn.
“What is still concerning is the North East’s disproportionately high unemployment rate, of 6.2 per cent compared to the UK average rate of 5 per cent. The region entered the crisis with higher rates of regional unemployment compared to more prosperous areas of the UK.
“Without commitment from government to tackle our region’s unemployment rate and level up the whole of the North East, there is a risk that regional economic disparities could be widened and levelling up a pipe dream.”
Jack Kennedy, UK economist at Indeed
“With the unemployment rate easing back and the number of payrolled employees rising for three months in a row, there are some green shoots in this data.
“A year on from the day a shellshocked Prime Minister declared the first national lockdown, Britain’s labour market is still reeling. Nearly 700,000 fewer people are in work than were at this time last year, and the toll among under 25s has been nothing short of brutal - they account for 60 per cent of those losing their jobs.
“Looking ahead, the outlook is mixed. With the furlough scheme still holding back the floodgates of further job losses, the market is braced for a wave of further redundancies when government support is eventually withdrawn.
“For those looking for a new job now, competition in many sectors is intense. The ONS data shows that between December and February there were 601,000 vacancies across the UK, and that new jobs were being created at an ever slower pace.
“But the very latest data is more upbeat. In March, the number of jobs posted on Indeed rose - and the tally now sits at 29 per cent below the pre-pandemic level, up from 36 per cent at the start of 2021.
“Progress is halting but real. With the reopening of the leisure and hospitality sectors due to inject a surge of hiring over the summer months, for all the jobs market’s current weakness, the glass is at last starting to look half full.”
Laith Khalaf, financial analyst at AJ Bell
“A 0.1 per cent fall in unemployment wouldn’t normally be a great cause for celebration, but a year on from the first lockdown, every little win counts.
“Overall unemployment has been relatively benign so far in the crisis, thanks to the ton of government support that has been thrown at the labour market. Indeed, 19 per cent of the business workforce are currently on furlough according to the ONS.
“It’s scant consolation to anyone who has lost their job as a result of the pandemic, but the unemployment rate today is no worse than it was in 2015, despite large parts of the economy being shuttered for much of the last year.
“The economic inactivity rate for people aged 16 to 24 has reached a record high of 40.7 per cent, which means lots of young people without a job and not looking for one either. Part of that is probably due to the fact we’re still in lockdown and opportunities for work are restricted.
“But the number of young people in full-time education has also hit a record high of around 46 per cent, which shows that many are using the opportunity to upskill in preparation for the jobs market opening up.”
Sarah Coles, personal finance analyst at Hargreaves Lansdown
“You know the bar has been lowered when the fact that things are getting worse more slowly feels like good news.
“The rise in unemployment was lower, and after months of falling, employment may have actually risen slightly during January. This is especially good news given the fact that we spent the vast majority of the month in lockdown, with all but the essentials closed for the duration.
“The furlough extension announced in the Budget has given many employers the shot in the arm they needed to keep staff on.
“At the end of January, 4.7 million people were on furlough, the highest number in six months, so the security of knowing that some level of state support is on offer until September will mean both employers and their employees can sleep more soundly.
“We know this state support will gradually be withdrawn as we go through the summer, but for now it has been enough to slow the pace of job losses, and if things go to plan, employers will be able to rely on it until life bears more of a passing resemblance to normality.”
Ayush Ansal, chief investment officer at Crimson Black Capital
“This latest snapshot of the jobs market is better than many expected but there is still potentially a lot of pain to come.
“Government support packages are still keeping millions of people in jobs and when that support is withdrawn completely many firms will struggle.
“For the jobs market, 2022 could be the year when the reality of what the economy has just been through really starts to bite.”
Hannah Hall-Turner, co-founder of The Job Share Pair
“In such an unstable labour market, businesses will need to look for innovative solutions to retain key skills and experience.
“Now is a great time to trial different ways of flexible working to keep as many individuals in the workforce as possible, retain those skills and support the economy.
“If one good thing is to come out of the pandemic in relation to work it will be the rise in flexible working.
“The Covid-19 pandemic has shown organisations and workers that you can work from home, work flexibly, carry out caring responsibilities as well as a career, while remaining motivated and productive.”
Richard Baker, strategy and policy director at North East Local Enterprise Partnership (North East LEP)
“As we mark the anniversary of the first lockdown, today’s data release is a timely reminder of the changes which COVID-19 has meant for our labour market. It provides the latest official data which includes regional employment information for the three months up to and including January 2021 and also annual comparisons.
“In the most recent months, the headline data has been stable. The employment rate in the North East region, which includes the North East and Tees Valley LEP areas, remains the lowest in England at 71.3 per cent, 0.1 percentage points higher than in the last quarter but 0.4 percentage points down on a year ago.
“The region has the second highest unemployment rate (6.2 per cent of the economically active) and the highest proportion of working age people who are economically inactive (23.8 per cent). Almost 30,000 workers in the region have been made redundant during the past year.
“However, some of the recent impact of COVID-19 has been masked by an increase in the use of furlough in the region. Over 114,000 North East employments were furloughed at the end of January, more than double the total of three months earlier. Most furloughed workers continue to be classified as employed in the official statistics.
“The impact on different groups in our population has been different. Younger people have experienced particular challenges both in employment and training and there have also been different patterns in the impact for men and women in the past year.
“The number of unemployed women has increased by 14 per cent, while male unemployment is lower (by about 8 per cent). Almost 52 per cent of furloughed workers in the North East at the end of January were female.
“The progress we are seeing towards the lifting of lockdown restrictions offers hope for the thousands of businesses unable to trade. Support for these businesses remaining under restrictions needs to continue.
“The North East LEP will continue to work with government as we look to drive forward our economy and address some of the key challenges which COVID-19 has created in our region.”
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