CIPD/KPMG report shows slight improvement in jobs market
The latest report from the Chartered Institute of Personnel and Development (CIPD) and financial services firm, KPMG, shows that there is still no indication that the labour market is anywhere close to returning to its former health.
However, the report does show that while job losses will continue this quarter, it will be at a slower rate than at the onset of the beginning of the recession.
The latest official figures from the Office for National Statistics show that UK unemployment increased 88,000 to 2.47 million in the three months to August, taking the unemployment rate from 7.6% to 7.9%.
The figure was not as bad as expected and the rise in the number of unemployed was the lowest since July 2008.
In the meantime, the CIPD report, which surveyed over 700 employers, covering all sectors of the economy for the latest edition of its Labour Market Outlook (LMO), found that the percentage of employers expecting to hire more staff in the final quarter of 2009 is 3% lower than those expecting to employ fewer – a balance of minus 3.
It is a vast improvement on the balance of minus 19 reported in the second quarter and the minus 10 recorded in the third quarter and suggests that employers have made the necessary cut backs within their organisations at present.
Commenting on the report, Gerwyn Davies, public policy adviser at the CIPD, said: “The UK jobs market remains flat on its back. Things aren’t anywhere near as bad as they were earlier in the year, when redundancies spread through the economy like a virus – [however] the patient remains seriously weak and won’t recover for several years, even if a return to robust economic growth provides the necessary tonic, and could easily relapse if the recovery is as fragile and anaemic as many economists fear.”
Meanwhile, wage increases are expected to have declined to an all time low of 1.5%, compared with 1.7% in the previous three months.
Furthermore, the survey has established that approximately one in six firms has cut the working hours of at least some staff in the last 12 months.
Andrew Smith, the chief economist at KPMG, comments: “This recession has come through not only in job losses but also in greater labour market flexibility – reduced working hours, pay freezes and outright wage cuts.”
The current UK recession is now the longest since records began after the economy failed to return to growth in the third quarter.
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