Private-sector demand not enough to offset public job cuts
Monday 09 August 2010
The recovery in employment has stalled and demand in the private sector will not be enough to offset the expected layoffs in the public sector over the next three months, figures suggest today.
Demand for new staff in the private sector, which is currently compensating for a sharp decline in public sector jobs, will not last, says the quarterly Labour Market Outlook report from the Chartered Institute of Personnel and Development (CIPD) and accountant KPMG.
Of the 600 employers surveyed in every sector of the economy, the number who said they were more likely to make redundancies rose for a second quarter in a row, to the same level as a year ago.
Gerwyn Davies, the public policy adviser at the CIPD, said: "The employment situation looks like a case of the good, the bad and the ugly. A rise in unemployment in the next two years remains a distinct possibility as the private-sector recovery is offset by the 600,000 public-sector job losses expected over the next five years."
About 33 per cent of employers now plan to reduce staffing levels, compared with 29 per cent in the spring. In further bad news, many companies say they intend to lay off more employees this quarter than last – with 5.5 per cent of the workforce under threat, against 3.6 per cent in the previous quarter.
The CIPD/KPMG net employment index, which measures the difference between the percentage of employers looking to hire and those preparing to cut staff, is still in positive territory. However, it fell from +5 in the first quarter to just +2 in the three months to June.
There is a striking difference in the sectors, the survey found. The private sector employers' balance comes in at +19, while the public sector is at -35. That is in stark contrast to the previous pattern, buoyed by deliberate government action to boost the economy.
Alan Downey, of KPMG, said: "In the months ahead we will see a substantial reduction in the public-sector headcount as cuts begin to bite. That is the painful but inevitable consequence of the coalition's determination to tackle the massive structural deficit."
The decline in employment in the public sector is most keenly felt in local government, where the balance is -74. Public administration and defence is down -59.
The highest areas of growth in the private sector has been in manufacturing and production, where the index showed +40, and the information technology industry, which recorded a net balance of +42.
- 1 The black and blue dress: Makers considering a white and gold version
- 2 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 3 What color is The Dress, white and gold or blue and black? An eyewitness gives a definitive answer
- 5 Fearne Cotton quits Radio 1 after ten years for 'family and new adventures'
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
This is what it's like to be dead, according to a guy who died for a bit
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...