Jobs market 'slow, painful contraction' predicted


One woman's struggle to find work and Gerwyn Davies from the CIPD on why they are not optimistic about the jobs market

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The UK labour market faces a "slow, painful contraction" with firms delaying recruitment of more staff, a key report suggests.

The Chartered Institute of Personnel and Development (CIPD) predicted the jobs market would worsen in the medium term amid global economic "turmoil".

Its quarterly survey of 1,000 employers found firms' future hiring plans dwarfed by likely public sector losses.

A separate Barnardo's report said jobless teenagers were being "ignored".

It found employers adopting a "wait and see" policy towards the economy.

This involved reduced recruitment as well as fewer redundancies.

The number of UK employers planning to outsource work overseas or hire migrant workers had also fallen substantially in the last three months, the survey found.

The CIPD said the employment situation could worsen if the eurozone crisis thrust the world back into recession.

Business 'lull'

CIPD public policy adviser Gerwyn Davies said: "The good news resulting from this lull in business activity is that fewer employers are looking to relocate abroad or make redundancies.

Graph showing unemployment in UK since 1992

"The downside is that recruitment intentions are falling, which will make further rises in unemployment therefore seem inevitable given that public sector job losses are outpacing the predictions made by the Office for Budget Responsibility.

"There is no immediate sign of UK labour market conditions improving in the short or medium term."

Monday's report comes two days before the latest official unemployment figures are expected to show that jobless 16 to 24-year-olds total more than a million.

David Cameron and Ed Miliband spoke about the economy during a visit to Birmingham

Last month, the CIPD reported that the public sector had been shedding jobs at five times the rate previously predicted by the Office for Budget Responsibility (OBR).

The think tank called on the government to "call a halt to public sector job cuts while the economy and labour market remain in the current fragile condition".

But the Treasury said "risks in the global economy make it even more essential to stick to the government's essential deficit reduction plan".

It insisted that private sector job creation would substantially outweigh the public sector cuts by 2015, according to the OBR forecast.

'Lost generation'

The Barnardo's study said the most disadvantaged unemployed 16 and 17-year-olds were seeing their chances of learning new skills to help them find work "rapidly declining".

It said that government reforms to reduce unemployment were wrongly prioritising young people from the age of 18 and above.

Barnardo's chief executive Anne Marie Carrie said: "Britain's uneven playing field is causing an entire generation of the most disadvantaged teenagers to become 'lost in transition'.

"Proof of this lies in the unemployment rate for 16 and 17-year-olds, which has almost doubled over the last decade."

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Claimant count - June 2012


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  • rate this

    Comment number 403.

    So 1.5 million people are employed under a Labour government than those unemployed under a Tory government! There is a theory that these people are public sector, but these figures do not hold up

    I saw a 60 year old man trying to gain employment at a colleagues firm who was clearly disabled and we all felt sick to our stomach's. It's inhumane how these Etonians are treating our people.

  • rate this

    Comment number 328.

    We rarely hear true state of employment.
    About 70% those eligible to work actually employed.
    30% unemployed but some of those have more than £2500 in the bank aren't entitled to claim, some on disability don't get counted. Others studying at college. Also how does it work if someones on Incomne support instead of JSA? Do they count them differently? Proper break down of figures, anyone?

  • rate this

    Comment number 320.

    We're a small overcrowded island that doesn't produce much, has few natural resources and has had a good standard of living on the back of spivs in the city. The actual jobs that create any wealth rather than shuffle money about is frighteningly small. This is a result of short term thinking by ALL politicians. Remember Crash Gordon's mantra 'No return to boom and bust' whilst stoking the fire?

  • rate this

    Comment number 309.

    The Government need to change course and focus on investing in jobs, creating the business climate for jobs, and growing the economy. That should be the number one priority. When you have 3 million unemployed – Always number one.

    Instead they are bickering over unclear health reforms, an unwanted EU referendum and playing the blame game on border controls.

    Sort it out Cameron.

  • rate this

    Comment number 293.

    Yet more "predictions" - which are always wrong! Things are not as bad as the press, the banks or the government would have us believe. Fear is keeping people from spending. Only by trading will economies recover. As they have done for the last 5,000 years - and will do so again. Forget bonds, hedge funds and stock markets - they make nothing. Entrepreneurs are the future and it is very bright.


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