Jobless figures are set to rise later in the year, ending a recent downward trend, according to a leading business group.
A survey of 1,000 employers has found that the number of employers who are hiring staff has decreased below the number of employers who are not hiring at all.
If the number out of work starts to rise again, having steadily fallen over the last year, it will be a serious blow to the Government’s attempts to kick start growth.
Unemployment is currently at 7.7 per cent of the workforce, or 2.45million.
The Chartered Institute for Personnel and Development, in partnership with consultants KPMG, conducts a labor market survey every three months.
The latest report says: ‘On average, growth in hiring intentions has been reported throughout the past year, but a more somber outlook is now being driven by a fall in confidence among private sector employers, particularly in manufacturing’
The CIPD index measures the difference between the proportion of employers that intend to increase total staffing levels and those that intend to decrease total staffing levels.
The latest survey refers to recruitment in the third quarter of 2011.
‘It has fallen to -1 from +3 in the past three months,’ the survey says. ‘Long-term prospects are even worse, with the 12-month employment index falling to -6 from +2 last quarters.’
In the private sector more firms are hiring than not, but the number taking on new staff has fallen by a third over the last three months.
‘Clouds are gathering’: Andrew Smith chief economist at KPMG said that hopes of a rebalancing of the economy are being hit by sinking manufacturing confidence.
The survey also points to a further widening of the north-south divide. ‘The three-month net employment balance for the south of England is +10 across all sectors, while the balance for the north is -6.’
Gerwyn Davies, public policy adviser at the CIPD, said: ‘Increasing uncertainty about growth prospects in both the UK and global economies is now affecting hiring intentions, particularly in those industries such as manufacturing that stand to lose most in the event of a global slowdown.
‘Together with the public sector redundancies, which will affect one in 20 frontline workers according to our survey, the recent story of an employment revival may become one of an employment relapse.’
A Treasury spokesman said: ‘We have started to rebalance the economy in order to achieve growth that is sustainable. In the last 12 months more than 500,000 jobs have been created in the private sector.’
A spokesman for the Department of Business added: ‘Our Plan for Growth has set out an ambitious path. Twenty-three of the measures in it have already been implemented and another 80 are being implemented now – measures like lower corporate tax rates, less regulation for small companies, welfare reform, improvements to the planning system and lower taxes for entrepreneurs. But there is much more we can do and we will set out further action in the autumn.’