Connecting to LinkedIn...

Blank

Competition for jobs falls to one year low in July...but salary squeeze tightens

Competition for jobs falls to one year low in July...but salary squeeze tightens

Highlights

•             Advertised salaries &pound2,182 p.a. (6.43%) lower in real terms compared to July 2012 as salary growth lags further behind inflation

•             Jobseeker competition eases to its lowest level for twelve months, with 2.7 jobseekers for every vacancy in the UK, down from 2.9 in June and 3.1 in January

•             Big regional disparities – 72 jobseekers for every vacancy in Salford in July compared to just 0.35 in Aberdeen

•             Total number of UK Jobs advertised in July up 1% year-on-year to 524,656

•             Sharpest salary improvements in North West and North East over the past six months

•             Narrowing north-south divide – competition for jobs easing in Manchester, Newcastle and Scotland

Competition for jobs fell to its lowest level for twelve months in July, but the squeeze on salaries tightened, according to the latest UK Job Market Report from Adzuna.co.uk, the search engine for jobs.

While the number of jobseekers has fallen to 2.7 per vacancy in July, down from 2.9 in June and down from 3.0 in July last year, the average advertised salary dropped sharply compared to twelve months ago and fell even further behind inflation.

The average advertised salary in July was &pound33,462 p.a., down 3.5% from &pound34,633 p.a. one year ago. In real terms, the average salary has fallen 6.43%, or &pound2,182 p.a., over the past twelve months. The pace of the year-on-year fall in salaries quickened compared to June, when the average advertised salary was 5.6% lower than twelve months previously.

But the on-going salary squeeze hasn’t held back job creation over the past year. There were 524,656 job vacancies in July, 1% higher than July 2012, reflecting the improvement in the economy over that period. And the number of vacancies held steady compared to June, defying the usual summer drop.

Flora Lowther, head of research at Adzuna, explains: “A sustained salary squeeze is the dark cloud lingering over a brightening UK jobs market. All other indicators show life is improving for jobseekers. Competition for vacancies is easing, there are more jobs available, and the north-south divide is showing signs of narrowing. But salaries have fallen sharply in real terms. They haven’t kept pace with the relentless march of inflation, which is a major reason why the economic recovery hasn’t been more dynamic.

“Job vacancy numbers are the best barometer for the health of the labour market, particularly in key sectors like manufacturing and construction. Using the unemployment rate to judge the state of the economy is spurious because it can stay the same even when output and productivity are improving. If the population and size of the workforce increases, as they are doing, then the unemployment rate can remain unchanged even though there are more people in work and the economy is stronger. If it wants a leading indicator of the health of the labour market, the Bank of England would be much better off using real-time vacancy and salary data as the basis for its forward guidance on interest rates.”

July’s data did suggest a wage recovery might be on the cards over the coming months. Although the average advertised salary in July was significantly lower than July 2012, it did rise 0.8% from June.

Chart 1

June 2013

July 2013

Month Change

12 month change

UK Vacancies

525,230

524,656

-0.1%

1.0%

Jobseekers per Vacancy

2.9

2.7

-6.9%

-10%

Av. Advertised UK Salary

&pound33,206

&pound33,462

0.8%

-3.5%

Where are all the Jobs? Improvement in the northern labour market

There was better news for jobseekers in the North of England and in Scotland this month. Over the past six months, the North East and North West have seen the biggest increases in advertised salaries, outpacing even London. The average salary has risen 1.8% in the North West since January and 1.6% in the North East. London has only grown by 0.9%.

Competition for jobs has fallen 6% in Manchester and 10% in Newcastle over the past six months. 

The number of people in work in Scotland has hit a four year high. Competition for vacancies has eased in Edinburgh, Glasgow and Aberdeen since the end of Q1 this year.

Flora Lowther comments: “Conditions are starting to improve for jobseekers in the north. Advertised salaries are growing fastest in northern towns & cities, and more jobs are being created than ever before outside of London and the South East. The construction and manufacturing sectors are certainly propping up the job market in this part of the country, with some early indications that government efforts to revitalise the economy outside of London are starting to take effect."

However, despite the improving labour market in northern regions, there is still a north-south divide in the UK jobs market. Six of the top ten easiest places to get a job have less than one jobseeker per vacancy, and with the exception of Aberdeen they are all in the south of England.

Nine of the top ten hardest places to find a job in July were in the north, with Salford, Sunderland and Hull the toughest places to get work. There were 72 jobseekers per vacancy in Salford during July – the highest in the UK. In stark contrast, the easiest place to find work, Aberdeen, had just 0.35 people competing for each job.

Jobs market improving in key sectors

Adding to strong signals that a UK economic recovery is gathering pace, vacancies in the manufacturing and construction sectors increased sharply in July. There were 9% more construction and 6% more manufacturing vacancies than in July 2012.

The average advertised salary in the IT sector has risen 9% over the past twelve months and the average salary in Energy, Oil & Gas has also bucked the negative UK trend. Jobseekers looking for a vacancy in the energy sector can expect to be paid 34% more than the average UK jobseeker.                                                  

Comment on the rise in construction jobs Owen Goodhead, managing director of Randstad CPE, said:

“Despite a decline in construction output over the last few years, big infrastructure projects and large developments in London and the South East have helped keep the jobs market ticking over. But the fortunes of the construction sector are on the turn. Demand for construction staff has been strong over the last year and this growth in demand is now starting to translate into improved output. Skills shortages are still widespread across the industry though, and being able to nurture more home grown talent and attract skilled staff from overseas is vital if the sector is to flourish.   

“The construction industry has been one of the most squeezed sectors throughout the economic downturn but it is also one of the most vital in determining the overall health of the economy. Many indicators are pointing towards a sustained recovery in the UK, and with the construction sector beginning to join the party, more and more commentators will begin to feel a lot happier about the prospects of continued growth.”

Tags:

Articles similar to

Articles similar to