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14 August 2018
Tight UK labour market stifling growth

News from REC

Today’s labour market statistics published by the Office for National Statistics (ONS) show a record number of available vacancies at 829,000 for May to July 2018, 51,000 more than the previous year and the highest since records began in 2001. This is coupled with an annual fall of EU nationals working in the UK to 2.28 million, a drop of 86,000, the largest fall since records began in 1997.

The unemployment rate was 4.0%, the lowest since 1975, and there were 1.36 million unemployed people, 65,000 fewer than for January to March 2018. There were 32.39 million people in work, 42,000 more than for January to March 2018 and 313,000 more than a year earlier.

Growth in average weekly earnings in real terms was slow, with figures showing regular pay increased by 0.4% (excluding bonuses) and total pay by 0.1% (including bonuses), compared with the previous year.

Recruitment & Employment Confederation (REC) chief executive, Neil Carberry commenting on ONS figures:

‘Today’s numbers confirm the labour market is tight, with high employment rates meaning things are more difficult for firms who want to grow their workforce. Recruiters have been reporting this for some time now – and employers are having to think about how best to attract new staff. Our data suggests that employers are offering higher starting salaries to try and attract skilled candidates away from their current roles, but as yet more substantial pay growth hasn’t fully filtered through to all employees. People willing to move jobs are the most likely to secure a larger pay rise.

‘Growing demand for people is now pushing against the capacity of our labour market – especially in some particularly in-demand sectors and growing regions. The situation is only exacerbated by a continued decrease in the number of EU nationals choosing to work in the UK. For UK business to continue to flourish it’s critical that there is a comprehensive mobility and migration deal with the EU post-Brexit, so firms have the capacity to invest and grow here in the UK.”

 

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