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Employment & financial professionals comment on ONS labour market statistics

"We need jobs growth on this scale to provide employment for our growing population and reduce unemployment further but our economy needs to be raising the productivity of those jobs too as this is the only way we are going to see sustainable growth in real earnings, which continue to disappoint.

“Now is the right time for businesses to invest in new equipment, processes and in developing the workforce – while interest rates remain low and before skills shortages become widespread.  With stable growth, the next government will also need to focus on increasing productivity – which doesn’t just increase living standards but makes it easier to reduce the deficit.

“Businesses and government need to recognise that people drive workplace productivity and that the right training and skills development is key to unlocking business potential. Simply getting more people into work isn’t a long-term solution for individuals or for economic prosperity. We must focus on whether those people have the skills, training and clear direction to do their jobs well and where they haven’t, take urgent and lasting steps to plug those knowledge gaps.”

Hannah Maundrell, editor-in-Chief of money.co.uk, said, "It’s really positive to see the trend for increased employment has continued for yet another month, so that we’ve now reached a point where the proportion of people in work at its highest since records began. This certainly adds to the wider picture of an economy on its way to recovery.

"With average earnings now growing faster than inflation and an increased personal allowance, on paper it sounds like there should be fewer households struggling financially. In reality, much more still needs to be done to support people into regular work that pays enough to support a decent standard of living and provides opportunity for a satisfying career."

Neil Carberry, CBI Director for Employment and Skills, said, “It’s great to see 248,000 more people in work, the fastest rise in employment in just under a year – thanks to our flexible jobs market. With real wage growth rising people have a little more money in their pockets. But we need to see a recovery in productivity before wages can rise faster."

Andrew Hunter, co-founder of Adzuna, commented, “Unemployment continued to fall in February and our latest Jobs Report showed there are almost a million current live vacancies so prospects are as good as they have been for some time for those looking for a new role.  Combined with average earnings rising again – advertised salaries rose 8.1% in February according to our figures – the latest labour market statistics provide a timely pre-election boost for the Government.

“This virtuous circle has been a long time in the making, so the pressure is very much on the winning party to keep the momentum moving after the General Election.  However, it is also important that we don’t rest on our laurels and assume that the battle is won.  There is still work to be done, not least on zero hours contracts and improving apprenticeship opportunities, before we can claim a completely harmonious jobs market.” 

David Kern, Chief Economist at the British Chambers of Commerce (BCC), said, “The latest figures continue to highlight the dynamism and resilience of the UK labour market. Rising employment levels and falling unemployment supports our view that the UK economy will record steady growth in the first quarter, despite the recent disappointing construction and production figures.

“And it is very welcome news that wage increases are now higher than inflation and are boosting living standards.

“However, challenges remain - we must address the youth unemployment rate. Although it continues to fall, it is still more than three times the national average.”

David Bharier, BCC business insight manager, said, “The BCC’s Quarterly Economic Survey* shows a steady level of growth in employment levels since the 2008-09 recession, despite slight slowdowns in recent quarters.

“However, a majority of firms from both the manufacturing and services sectors struggle to find the right staff, with 69% and 65% reporting recruitment difficulties in the last three months, respectively.”

Geraint Johnes, directorat at Lancaster University’s Work Foundation, said, “The labour market statisticsreleased today reflect a continued strengthening. Employment has risen by some 248000 over the last quarter, and unemployment has fallen by 76000, with an additional large drop in the numbers of people economically inactive - particularly amongst those aged under 25. The overall unemployment rate now stands at 5.6%. The picture of falling unemployment is replicated within most regions - though small increases were recorded in Scotland, Northern Ireland and also in London and the South West.

“Gains have been particularly strong in full-time employment, with numbers increasing by 191000. Of these, 147000 are men. The number of full-time self-employed workers has fallen by 27000, possibly indicating a continued move toward job security.

“Industries performing strongly include construction, the real estate sector, and administrative and support services, all of which experienced job growth in excess of 30000 over the quarter. Meanwhile numbers employed in health and social work declined over the quarter by some 30000.

“The picture on pay remains very mixed. The year on year growth in overall pay has slowed to 1.3% - down on last month's figure and well down on the 2.4% recorded in December of last year. This is largely due to a sharp fall in bonuses in the finance sector, however. If we look at regular pay (excluding bonuses), the average increase has risen to 2.2% and there have been gains of 3% or more in both the finance and the distribution sectors. In manufacturing, there is zero growth of regular pay including bonuses, pay growth in this sector is now negative. While price inflation remains low, workers can enjoy an increase in real pay - something that they have lacked in recent years - but if, as expected, prices rise further into the year, these gains may well erode. There is certainly little sign of wage pressure in the market, and it still looks as though the rate of unemployment at which we can consider the economy to be at capacity is lower than we might have thought in the days before the recession.

“The general buoyancy of the labour market is further evidenced by an increase in vacancies across almost all sectors - the only exceptions being mining and quarrying, and education.”

 

 

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