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‘Signs of recovery’ in jobs market

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15/06/2021
The UK jobs market is “showing signs of recovery”, with the number of payrolled employees increasing for the sixth month in a row, official figures show.

The employment rate for February-April was 75.2%, 0.2 percentage points higher than the previous quarter, according to the Office for National Statistics (ONS).

Unemployment stood at 4.7%, 0.3 percentage points lower than the previous quarter.

Sam Beckett, head of economic statistics at the ONS, said: “The number of employees grew strongly in May, up by almost 200,000, although it is still over half a million down since the pandemic struck.

“Job vacancies continued to recover in the spring, and our early estimates suggest that by May the total had surpassed its pre-pandemic level, with strong growth in sectors such as hospitality.”

The most notable growth in job vacancies was in accommodation and food services indicating an industry reacting quickly to the easing of lockdown restrictions, the ONS said.

The redundancy rate returned to pre-pandemic levels between February and April, while the number of furloughed employees has continued to decline.

However, experts warn the four-week delay to fully reopening the economy, announced on Monday, could halt progress.

“The continued recovery of employment depends on people being able to return to work, and on businesses staying open and viable. If the Delta variant puts any of these things at risk, the jobs market will be under pressure,” said Sarah Coles, personal finance analyst at Hargreaves Lansdown.

“It also raises questions about the furlough scheme. After the change, the economy won’t be fully reopened by the time the furlough scheme tapers on 1 July.

“We know from our experience last year that as soon as the taper kicks in, employers will have to consider their position, and whether they can afford to keep staff on. They might not make anyone redundant on day one, but their jobs will be under increasing threat as time goes on and government help is withdrawn further.”

The furlough scheme is due to run until the end of September. The government is taking a tapered approach, with employers starting to make a contribution to paying their employees who are still on furlough from next month.

As the economy reopens and demand returns, the government will ask employers to make a contribution of 10% towards the cost of paying for unworked hours from July. This employer contribution will increase to 20% in August and September.

 

 

 

 

 

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