Competition for jobs fell to a six year low in May, according to the latest UK Job Market Report from Adzuna.co.uk.
There were 1.33 jobseekers for every advertised vacancy in May 2014, down from 2.18 twelve months ago, helped by a jobs boom in Northern England. It was the lowest ratio of jobseekers to vacancies since May 2008.
Available vacancies have also increased by 19% over the last year. There were 818,471 advertised positions in May 2014, compared to 686,446 in May 2013. Increasing job creation has factored into falling unemployment, which has dropped to 6.6% from 7.8% a year ago.
|April 2014||May 2014||Monthly Change||Annual change from May 2013|
|Jobseekers per Vacancy||1.39||1.33||-4.3%||-39.0%|
|Av. Advertised UK Salary||£32,185||£32,376||+0.6%||-4.7%|
Andrew Hunter, co-founder of Adzuna, explains: “The robust economic recovery has relieved the log-jam in the labour market, clearing the way for the creation of far more jobs across the nation. Vacancies have boomed over the last year and the number of jobseekers chasing down each role has fallen to a six year low. Businesses are expanding and taking on new staff as profits begin to flow into their balance sheets. Jobseekers looking to move have far more options to choose from.”
Recovery in the North
The fall in competition amongst jobseekers has been helped by rapidly recovering regional economies, particularly in Northern England. Twelve months ago, there were more than 20 jobseekers competing for each advertised position in half of the towns in the North. A year later competition in these towns has halved.
As of May 2013, The Wirral was the worst area to find a job in the UK, with nearly 57 jobseekers per vacancy. In May 2014, the number of applicants per role has fallen to just 17. This trend was echoed across the North West and Yorkshire. In Salford, the worst city to find a job in May 2014, the number of jobseekers chasing down each role has fallen from 49 to 20, while in Sunderland it has declined from 40 to 14.
Andrew Hunter, co-founder of Adzuna, explains: “Growing manufacturing opportunities in the North West and Yorkshire are beginning to bridge the North-South divide in the labour market. Osborne’s ‘Northern powerhouse’ proposals for a high speed rail link between Manchester and Leeds will no doubt close that gap even further. In order to support workers from the top to the tail of the UK, we need more projects that will connect and develop pockets of industry and continue to stimulate new job vacancies. HS3 should be the latest scheme of many.”
The best city to find a job in the UK in May was tech-hub Cambridge, with a ratio of 0.15 jobseekers to vacancies compared to 0.60 a year ago. In other words, there are seven jobs for every jobseeker – up from two just twelve months ago.
The labour market is showing evidence of emerging wage growth, with pay increasing for the second consecutive month in May. Advertised salaries increased 1.2% between March and April, and a further 0.6% in the month to May 2014. Live Adzuna data shows this trend continuing into June.
Andrew Hunter, co-founder of Adzuna, explains: “Wages are truly beginning to turn a corner, with employers increasing salaries in a bid to attract the talented staff they need to grow. It is helping to turn a much needed rise in real wages from distant dream to tangible reality.
“Given inflation fell to 1.5% in May, it’s hard to see the Bank of England holding off on raising interest rates until 2015. Surely the Bank’s ‘wait and see’ tactics will only last as long as the summer months. Our data suggests a rate rise is most likely in Q4 of 2014.”
IT and Engineering sectors flourish
The steadily developing IT and Engineering sectors have shown the strongest salary growth over the last year.
The average salary for IT jobs was £44,844 in May – 5.1% higher than twelve months ago. In the Engineering sector, the average salary was £35,616 – 4.7% higher than a year ago.
City salaries have also been building. The average advertised salary for finance & accounting jobs increased 3.2% over the last twelve months to £37,237, while the average salary for legal jobs grew 2.8% over the same period to £39,293.
Andrew Hunter, co-founder of Adzuna, elaborates: “The green shoots of wage growth are being supported by the IT and Engineering sectors, as well as City based finance and legal positions. London’s burgeoning Tech City now rivals Silicon Valley in terms of attracting new tech talent. Tech firms are choosing London as a base to kick-start their business, as the capital offers the best IT staff and also has the latest technology, allowing start-ups to stay ahead of the curve.”
The story looks significantly less positive for the retail sector which experienced the largest decline in advertised salaries over the past twelve months. Advertised salaries fell 8.6% year-on-year to £27,138 in May, as supermarket price-cuts lead to lower retail profits, leading employers had to cap the wages they could offer prospective employees.
Salaries across the nation
Every region of the UK bar Northern Ireland saw salary growth between April and May, with the West Midlands, Yorkshire and the Humber and London showing the strongest growth in pay rates.
Advertised salaries in the West Midlands rose 1.4% month-on-month in May to £28,352, helped by growing business investment in Birmingham, although wages in the region remain around £4,000 lower than the UK average. Yorkshire and the Humber – the area with the lowest average salary – experienced the second strongest salary growth (+1.0%) in May.
|Region||Average salary||Monthly change|
|Yorkshire and The Humber||£27,689||+1.0%|
|South West England||£29,021||+0.6%|
|North East England||£27,716||+0.3%|
|South East England||£31,019||+0.3%|
|North West England||£28,352||+0.1%|