Jane Imrie

"Clicking back into gear": Businesses react to latest ONS labour market statistics

The Office of National Statistics has today published its latest figures on the UK labour market.

According to the ONS, the number of payroll employees across the UK has increased for the fifth consecutive month.

The organisation’s estimates for January to March 2021 also show signs of recovery, with a quarterly decrease in the unemployment rate.

Businesses across the country have responded to the news and what it means for their region and sector.

Suren Thiru, head of economics at BCC

“The decline in the unemployment rate and the rise in payroll employment is further confirmation that the UK jobs market is now more resilient to the ongoing restrictions.

“Continued government support and the easing of restrictions as the UK moved to step two of the government’s roadmap helped drive higher payroll employment in April.

“The rise in the number of job vacancies points to an encouraging upturn in demand for labour amid the gradual reopening of the economy and the strong vaccine rollout.

“UK unemployment remains on track to peak at a much lower level than in recent recessions. However, the squeeze on business cash flow from any marked delay to the planned full reopening of the economy may trigger renewed job losses, particularly when furlough becomes less generous over the summer.

“The economic scarring caused by coronavirus may drive a two-track jobs market recovery, with strong demand for labour in sectors where activity rebounds quickly, but with young people now entering the workforce and those whose lost their job during the pandemic at particular risk of longer-term unemployment.

“More interventions are likely to be needed to support the UK jobs market, including extending the kickstart scheme help protect young people from the risk of displacement from labour market.”

Eleanor Harrison OBE, chief executive at youth charity Impetus

“Young people make up nearly two-thirds of job losses since the start of the pandemic.

“As many clamber to spend savings and disposable income at newly reopened pubs and restaurants, this will be the first income for many young people since the beginning of the pandemic as they return to work in the hospitality sector, one of the largest employers of under-25s.

“A coordinated long-term plan is needed to support the thousands of young people still looking for a way back into meaningful work, starting with the extension of the government’s flagship youth employment scheme; Kickstart is not a nice to have – it’s a must .”  

David Morel, CEO of Tiger Recruitment

“The latest ONS data for the period February to April 2021 shows that the jobs market is finally in recovery. For the first time since December 2019 to February 2020, the employment rate increased whilst April vacancies neared their pre-pandemic levels. This is hugely encouraging and bodes well for the future.

“Of course, these figures are in the past but the experience of my own business suggests that this upward trend is set to continue.

“In May, we have taken on the highest number of new permanent business support roles since the start of the pandemic. The hospitality sector is particularly buoyant as indoor venues open up again and currently the demand for staff is outstripping supply.

“Temporary business support hiring is also picking up and we expect the pace of recovery to increase as offices start to go back and business travel resumes.

“Looking ahead, the Indian variant is a cause for concern but as long as we avoid any further national lockdowns, I see a bright outlook for the jobs market.”

Sarah Coles, personal finance analyst at Hargreaves Lansdown

“Pinch yourself, because there’s good news from the labour market. Overall unemployment is down slightly, employment is up, the redundancy rate has fallen by a record during the quarter and vacancies soared in March. However, we’re not out of the woods just yet.

“We’re still below the pre-pandemic employment rate, but signs of recovery are a welcome relief. Official quarterly job vacancies also remain below pre-pandemic levels, but early experimental data for March showed a surge to the highest point since the start of the crisis, as restaurants, hotels and bars ramped up recruitment ready for reopening.

“Before anyone breathes a sigh of relief, they’ll have to hold their breath for what comes next. Right now, one in five of the workforce is relying on the furlough scheme to keep them in a job.

“If the reopening of the economy goes to plan, there’s every chance employment will continue on its upwards path, and by the time the furlough scheme is withdrawn, most staff will be back in work.

“The Bank of England is optimistic. It forecasts that by the end of the furlough scheme, just half a million people will be taking advantage of it, so the unemployment rate will peak at 5.5 per cent this autumn - well below its previous predictions.”

Tom Pickersgill, CEO and co-founder of Orka

“While we’re a long way off pre-Covid levels, the jobs market does look to be clicking back into gear.

“We’re starting to see positive signs of recovery in the sectors that we work in, with the security industry in particular seeing far more job vacancies, thanks to the easing of lockdown measures and reopening of hospitality venues, retail and travel.

“A lot of employers will now be looking to fill vacancies quickly, however with some uncertainty still in the air, many companies will be opting for temporary roles for the time being.

“With this in mind, it’s important that job seekers consider temporary work platforms as potential routes into employment and income. Worker tech apps can also play a crucial role in helping companies to plug gaps, while getting people back into work efficiently.”

Niamh Corcoran, policy advisor at North East England Chamber of Commerce

“The numbers released today offer hope that economic indicators are beginning to head in the right direction, with North East unemployment declining and employment rising. It is without a doubt that the Government’s Job Retention Scheme has had a key role to play in this, by protecting jobs and livelihoods during the two waves of the pandemic.

“Whilst the figures today offer early signs of a stabilising labour market, it’s important we do not become complacent. As lockdown eases, a number of sectors, such as culture and retail, are yet to bounce back. It will likely be a long process for those sectors to return to pre-pandemic levels of capacity and employment growth.

“Today’s national statistics also expose the disproportionate impact of the crisis on young and older workers. Long term unemployment is rising at its fastest rate since 2010, with unemployment for young people and the over 50s at the highest rate in five years.

“As the labour market begins to stabilise, it is vital that Government takes action and makes concerted efforts to bolster deeply impacted economic sectors and prevent young and older workers from falling into long-term unemployment.”

Richard Baker, strategy and policy director at North East Local Enterprise Partnership (LEP)

“The headline North East regional data released today is encouraging after the challenges of the last year with signs of improvement in the labour market in the first three months of 2021. Employment increased by 14,000 compared to the last quarter of 2020 and unemployment decreased by 13,000.

“However, this is just the start of the recovery and there is much work to do. Despite these increases, the figures show that the region has the lowest working age employment rate at 72.2 per cent, compared to 75.5 per cent across England.

“It also has the third highest unemployment rate in England (5.4% of the economically active) and the highest proportion of working age people who are economically inactive (23.5 per cent).

“Over the past year, COVID-19 has impacted on the lives of many people in the North East region. About 32,000 workers have been made redundant since the start of 2020 and the number of payrolled employees in April was about 18,000 lower than in February 2020.

“At the end of March, almost 140,000 workers in the region were still furloughed. This meant that they were classified as employed in the official statistics, but in an uncertain position about their futures.

“About 44 per cent of these worked in either food and accommodation services or retail, which highlights how important the impact of the changes to the rules which are now happening will be to North East employment trends during 2021.

“As the controls on the economy are unlocked, the North East LEP will continue to work with Government and our partners to drive forward our vision of a more sustainable, competitive and inclusive regional economy.”

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