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Floods give UK jobs market unexpected boost

With an Outlook of 6%, employers across the UK intend to take on staff in the second quarter of 2014 as the economic recovery gathers momentum. And for the first time since 2008 employers in every sector are intending to hire.

The Manpower Employment Outlook Survey is based on responses from 2,112 UK employers. It asks whether employers intend to hire additional workers or reduce the size of their workforce in the coming quarter. It is the most comprehensive, forward-looking employment survey of its kind and is used as a key economic statistic by both the Bank of England and the UK government. The national Seasonally Adjusted Net Employment Outlook of 6%[1] indicates that the jobs market is marginally up on the first quarter of 2014 when the Outlook was 5%.

“The UK jobs market has reached a turning point. Whilst the overall outlook has been consistently positive now for a number of quarters, it’s actually been six years since the employers we’ve interviewed have reported positive hiring plans in every single sector. In particular, the Construction forecast has been in negative territory since 2008 and was one of the sectors hardest hit by the recession, but with a score of 2% up from -6% last quarter, it has really bounced back. At last we can confidently say that the jobs market is starting to fire on all cylinders.” said ManpowerGroup UK Managing Director Mark Cahill.

Whilst government schemes like Help to Buy have undoubtedly given Construction a much needed shot in the arm, ManpowerGroup believes that the bad weather experienced across the UK throughout the winter could be responsible for the sector’s leap into positive territory. Cahill continues: “With over 6000 properties flooded, and an average repair bill of &pound30,000-&pound40,000, the beneficiaries of all this extra work will be builders who are already being called in to repair homes. Even in areas where flooding has been less of a problem, the persistent and heavy rain will have highlighted problems with roofs that need fixing, and that should help boost demand for the sector. We could be talking about an economic gain of about quarter of a billion pounds to this industry alone.”

It’s not just the Construction sector that may see a pickup from the floods. Utilities is another strong performer (10%). The combination of floods and high winds left many people without power. Mark Cahill again, “The energy companies that operate the networks have had to bring in extra engineers in recent weeks to restore power. The same companies are now having to take on extra staff to deal with both customer service issues and compensation claims. Looking ahead into next year, smart metering will soon be with us and we know from our conversations with the big utilty firms that they are planning to take on more people to facilitate this roll out of new technology.”  Elsewhere Agriculture Forestry and Fishing (15%) has seen a big rise this time round. The need to hire extra labour to deal with flooded fields and ruined crops may be a factor to explain this strong performance.

Whilst UK businesses of all sizes are hiring, what is particularly interesting this quarter is the strong message emanating from large firms. Big businesses are more optimistic now (17%) than at any time in the last decade. Mark Cahill: “Larger firms can afford to invest in initiatives such as graduate recruitment schemes and apprenticeships in a way that others simply can’t. There are long term benefits to be gained from big business hiring, such as training, which helps both job seekers and their future employers. A great example of this is BT which, in recent weeks, has pledged to create more than a thousand new apprentice and graduate jobs. After a sustained period of record youth unemployment, 2014 is promising to be the best year for young people and graduates in a long time.”

“The regional perspective for the second quarter of 2014 is also striking. Whilst London (5%) stands in line with the overall national picture, the bright spots on our survey come from the places you’d least expect them such as the North East (11%) and Wales (12%). Many have tried to write off the North East’s prospects – it was only last summer that the area was famously written off in Parliament as being & lsquo;desolate’ but if you look at its performance in our survey, it’s been a good year for the region. We’re even expanding our own operations in the North East with the opening of a new regional hub in Newcastle.”

The least optimistic forecast this time round is reported by employers in Northern Ireland. With a score of -4% it is the only part of the United Kingdom which does not indicate positive hiring intentions for the second quarter of 2014.

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