Earlier this morning the ONS April Labour Market Overview was published, outlining the latest job market statistics.
The report highlights that the number of job vacancies in January to March 2022 rose to a new record of 1,288,000. However, the rate of growth in vacancies continued to slow down.
Over the quarter the number of vacancies increased by 50,200 with the largest increase in human health and social work.
Commenting on these increasing vacancies, BCC Head of Economics, Suren Thiru, said:
“While payroll employment rose slightly and the unemployment rate continues to fall, the headline figures continued to be flattered by significant underlying factors, including a shrinking workforce.
“Increasing vacancies highlights the historic hiring crunch facing firms. With rising economic inactivity confirming that lots of workers have seemingly quit the jobs market completely, severe staff shortages may remain a persistent drag anchor on economic activity.”
The report highlights that the UK employment rate was “largely unchanged on the quarter at 75.5 percent, but still below pre-coronavirus (COVID-19) pandemic levels.
“The number of full-time employees increased on the quarter; however this was offset by a decrease in part-time employees. While the number of self-employed workers is still well below pre-coronavirus pandemic levels, it has increased slightly in the recent quarter.”
“The unemployment rate for December 2021 to February 2022 decreased by 0.2 percentage points on the quarter to 3.8 percent. Those unemployed for up to 12 months decreased during the latest period to a record low. Meanwhile, those unemployed for over 12 months continued to decrease from the peak in July to September 2021.”
James Reed, Chairman of Reed.co.uk, on the ONS Employment Data release:
“The economy is facing a crunch point as businesses contend with serious challenges, from rapidly rising inflation to severe labour shortages. The jobs boom that began last year continues to be reflected in the ONS’s labour market statistics. With job postings on Reed.co.uk in March increasing 18 percent year-on-year and 14 percent month-on-month, this trend shows little sign of slowing. But with economic growth now as low as 0.1 percent and unemployment at historic lows, the jobs boom is in danger of becoming a jobs overload.”
“The difficulties businesses now face in hiring staff, are having a knock on effect on supply chains, production output and the quality of goods and services. This is slowing the UK’s economic recovery from the pandemic.
“There are now 8.8 million people who are economically inactive in the UK, which is 600,000 more than at the start of the pandemic. This is a symptom of what I call ‘The Great Lie Down’, with many workers leaving the workforce altogether, some through long term sickness and others preferring early retirement or different lifestyle choices. If these workers are to be coaxed back, they will need convincing with attractive employment arrangements, higher wages and better conditions and benefits.
“Currently, less than 20 percent of these people who are economically inactive say they would like a regular, paid job. However, if it was possible to help this group find work then that would be of great benefit to both them and the economy.
“While there is no easy fix to these challenges facing businesses, with average salaries continuing to increase month-on-month, workers have never had a better opportunity to find a job they love or secure a pay rise or promotion.”
“More must be done to help people access rapid retraining opportunities for in-demand jobs, including assisting older workers to turn to more sustainable jobs. Introducing a new skills tax credit to incentivise employers to invest in training for workers would help to revitalise employer-led training.”
Ben Harisson, Director of the Work Foundation:
“Today’s statistics shows a mixed picture for the UK’s labour market recovery with employment stationery at 75.5 percent. and unemployment dropping to 3.8 percent. However, the vacancy rate remains high at 1.3 million, and economic inactivity continues to rise to 21.4 percent.
“Crucially, workers and job seekers are being hit by the largest fall in living standards on record as inflation outpaces wage growth. Many are struggling to make ends meet as regular pay growth is at 4 percent (excluding bonuses) but inflation continues to rise, with the Bank of England predicting inflation will reach 8 percent in Spring and could rise further later in the year.
“The Chancellor’s Spring Statement failed to provide economic security to the most vulnerable in society, including those in low paying and insecure employment. Universal Credit beneficiaries saw their benefits uprated by just 3.1 percent in April, lagging behind inflation. The Chancellor must return to despatch box and, at a minimum, raise Universal Credit in line with predicted inflation to provide security to those at the sharp end of the cost of living emergency.”