US jobs growth cooling down after biggest hiring spree in 40 years
With an Outlook of 6%, employers across the UK are still intending to take on staff in the coming quarter – but not at the levels we saw earlier in the year.
The Manpower Employment Outlook Survey is based on responses from 2,102 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% indicates that the jobs market has softened since the third quarter of 2014 when the Outlook was 8%.
“The UK jobs market has experienced an unprecedented boom so far in 2014, with job creation peaking at its highest level since records began in 1971. This raises questions about whether the phenomenal level of job creation we’ve seen can be sustained. The fourth quarter’s Outlook suggests it can’t, with a two point fall in hiring intentions – the sharpest dip we’ve seen in three years. While the UK economy is in robust health, there are issues that may be making employers more cautious. The Eurozone’s recovery is stalling, and the UK faces a period of political uncertainty with the Scottish independence referendum, a General Election and a potential vote on EU membership all on the horizon,” said James Hick, Managing Director of ManpowerGroup Solutions.
Despite the overall slowdown in hiring intentions some areas of unprecedented demand and acute skills shortages are changing the shape of the UK employment market. Hick comments, “While the pace of jobs growth has slowed, we are actually seeing the emergence of an hourglass jobs economy, with an abundance of demand at the top and bottom, while the middle remains squeezed. At the top of the hourglass we are seeing huge demand for skilled IT, finance and engineering candidates and our professional sourcing division has placed a record number of people to address skills shortages in these areas. While salary growth across the UK as a whole remains constrained, these sectors are bucking the trend as high demand is driving up pay.”
Hick continues, “Job creation in manufacturing has hit its highest level in six years, driven by manufacturing hubs such as the West and East Midlands, which top the regional tables this quarter. At the bottom of the hourglass there is also a barrage of demand for unskilled and semi-skilled workers in the service sector.”
Elsewhere in the UK, the previous Outlook indicated that employers in Scotland remained confident about their hiring plans in the run up to the referendum. As the 18th September draws closer, this confidence appears to have taken a tumble with a six point fall in the Scottish Outlook to 3%.
Hick again: “The Scottish jobs market is less buoyant as we edge closer to the referendum. This could be due to the hesitance of employers to take on staff while there is a big question mark hanging over Scotland’s future. However, the decline could also be down to the short-term nature of some of the recent hiring we’ve seen, fulfilling the demands of Scotland’s Summer of Sport. Major events like the Commonwealth Games and the Ryder Cup in Gleneagles have required large numbers of temporary staff to make them run smoothly, especially in distribution and catering. It looks like the booming temporary jobs market may have left Scotland at the same time as the Commonwealth Games baton.”
The picture in the rest of the UK is mixed going into the fourth quarter of 2014. London’s Outlook of 9% represented a strong bounce of eight points as the capital’s employers end 2014 at their most optimistic level of the year. Along with those in the West Midlands, employers in the East Midlands topped the charts with an Outlook of 12%. Also strongly positive is Yorkshire and Humberside, where employers finish an encouraging year with a two point increase in Outlook to 10%. In contrast, the Outlook in the South West fell into negative territory with an Outlook of -4%.
The South East Outlook dipped three points to 7% from 10% in the last quarter, but remains marginally above the UK rate. Along with Scotland, Wales (1%) and Northern Ireland (2%) both report hiring intentions below the national average, however the picture in Northern Ireland has improved with a six point jump to a positive Outlook after two quarters languishing in negative territory.