Tight UK Labour Market Stifling Growth

Today’s labour market statistics published by the Office for National Statistics (ONS) show a record number of available vacancies at 829,000 for May to July 2018, 51,000 more than the previous year and the highest since records began in 2001. This is coupled with an annual fall of EU nationals working in the UK to 2.28 million, a drop of 86,000, the largest fall since records began in 1997.

The unemployment rate was 4.0%, the lowest since 1975, and there were 1.36 million unemployed people, 65,000 fewer than for January to March 2018. There were 32.39 million people in work, 42,000 more than for January to March 2018 and 313,000 more than a year earlier.

Growth in average weekly earnings in real terms was slow, with figures showing regular pay increased by 0.4% (excluding bonuses) and total pay by 0.1% (including bonuses), compared with the previous year.

Recruitment & Employment Confederation (REC) chief executive, Neil Carberry commenting on ONS figures:

‘Today’s numbers confirm the labour market is tight, with high employment rates meaning things are more difficult for firms who want to grow their workforce. Recruiters have been reporting this for some time now – and employers are having to think about how best to attract new staff. Our data suggests that employers are offering higher starting salaries to try and attract skilled candidates away from their current roles, but as yet more substantial pay growth hasn’t fully filtered through to all employees. People willing to move jobs are the most likely to secure a larger pay rise.

‘Growing demand for people is now pushing against the capacity of our labour market – especially in some particularly in-demand sectors and growing regions. The situation is only exacerbated by a continued decrease in the number of EU nationals choosing to work in the UK. For UK business to continue to flourish it’s critical that there is a comprehensive mobility and migration deal with the EU post-Brexit, so firms have the capacity to invest and grow here in the UK.”

ENDS 

Notes to Editors

 1.    For more information, contact the REC Press Office on 0207 009 2157/2192 or pressoffice@rec.uk.com. An ISDN line is available for interviews on 0207 021 0584.

2.    Our model predicted the unemployment rate would remain at 4.2% and that there would be a decline in unemployment of 14,000 in the three months to June.

3.    The unemployment rate (the number of unemployed people as a proportion of all employed and unemployed people) was 4.0%; it has not been lower since December 1974 to February 1975. There were 1.36 million unemployed people (people not in work but seeking and available to work), 65,000 fewer than for January to March 2018 and 124,000 fewer than for a year earlier.

Vacancies are defined as positions for which employers are actively seeking to recruit outside their business or organisation. There were 829,000 job vacancies for May to July 2018. This was 20,000 more than for February to April 2018 and 51,000 more than for a year earlier – the highest since comparable records began in 2001

Comparing the estimates for employment by nationality (not seasonally adjusted) for April to June 2018 with those for a year earlier: UK nationals working in the UK increased by 332,000 to 28.76 million, EU nationals working in the UK fell by 86,000 to 2.28 million (the largest annual fall since comparable records began in 1997) and non-EU nationals working in the UK increased by 74,000 to 1.27 million.

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/august2018  

 5.     Jobs transform lives, which is why we are building the best recruitment industry in the world. As the professional body for recruitment we’re determined to make businesses more successful by helping them secure the people they need. We are absolutely passionate and totally committed in this pursuit for recruiters, employers, and the people they hire. Find out more about the Recruitment & Employment Confederation at www.rec.uk.com