Unemployment Falls, However Business Groups And Contractors Still Concerned

The news will be of no comfort to highly skilled IT Contractors who are presently enjoying the return of well paying contracts following the economic downturn. The recession caused many businesses to reassess their IT needs, with many deferring projects until a later date or cancelling them altogether. News of tougher times will undoubtedly prompt many CIOs to look at project deferral measures once more, meaning that tougher times could be ahead for contractors in 3-6 months time. Recently Gartner, the worlds leading Information Technology research and advisory company, outlined steps that Chief Information Officers (CIOs) should take to safeguard their business in the face of a second economic downturn.

Key Office of National Statistics Job Market Figures:

  • The employment rate for the three months to May 2010 was 72.3 %, up 0.3 on the quarter
  • The number of people in employment increased by 160,000 on the quarter to reach 28.98 million
  • The quarterly increase in total employment was mainly driven by part-time employees, which increased by 117,000 on the quarter to reach 6.63 million, and self-employment, which rose by 59,000 on the quarter to reach 3.93 million
  • The number of full-time employees fell by 22,000 on the quarter to reach 18.20 million
  • The unemployment rate for the three months to May 2010 was 7.8 per cent, down 0.1 on the quarter
  • The number of unemployed people fell by 34,000 over the quarter to reach 2.47 million
  • The number of people unemployed for up to six months fell by 54,000, to reach 1.16 million
  • The number of vacancies for the three months to June 2010 was 486,000, up 10,000 over the quarter
  • The sector showing the largest quarterly increase was wholesaling, retailing and motor vehicle repairs, where the number of vacancies increased by 11,000 on the quarter to reach 95,000
  • The earnings annual growth rate for total pay (including bonuses) was 2.7 per cent for the three months to May 2010, down from 4.1 per cent for the three months to April

Comments from around the United Kingdom Business Community

Nigel Meager – Director of the Institute for Employment Studies

“There are some encouraging signs of stronger labour market demand in this month\’s figures, with unemployment down by 34,000, and employment growing by 160,000. Vacancies have also risen again, though they remain well below pre-recession levels. However urgent policy action is needed to support the long term unemployed back into work to avoid the damaging long-term social impacts experienced in previous recessions. Official figures are yet to register a major downturn in public sector employment, but this will inevitably follow… it is unlikely that the real, but muted recovery in the private sector will be sufficient to offset significant public sector job loss.\”

Brendon Barber – General Secretary of the Trade Union Congress (TUC)

\”These are flat, disappointing figures and you need a magnifying glass to see much sign of recovery here. When the cuts start to bite not only will jobs be lost from the public sector but across the private sector too. Many firms will lose public orders, and there will be an inevitable knock-on effect across the wider economy. A double-dip is beginning to look more likely every day.\”

John Philpott – Chief Economic Advisor at the Chartered Institute of Personnel & Development (CIPD)

\”While the jobs market was clearly much perkier in the spring quarter, with close to 2.5 million people unemployed, it is still far from in the pink. And with a big public sector jobs squeeze already underway and the pace of economic recovery uncertain, things may look a lot less rosy by spring 2011 than they do at present. Today\’s good news may simply be the calm before the storm.\”

Hetal Mehta – Senior Economic Advisor to the Ernst & Young ITEM Club

\”There are still clear risks ahead as the public sector begins to shed jobs. It remains highly debatable whether the private sector is sufficiently strong to offset the drag from the public sector. For the first time in many months we have the two key unemployment indicators telling us the same thing: that the labour market is improving.\”

Ian Brinkley – Associate Director of the Work Foundation

\”Much will depend on whether the jobs recovery in knowledge intensive services can be sustained and accelerated before the impact of public spending cuts feeds through into reduced numbers directly employed by the public sector and by firms who depend on large orders from the public sector.\”

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