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Outlook for jobs worsens

It looks as though jobs are going to be lost from the public sector faster than they are going to grow in the private sector. So says the latest Labour Market Survey produced by the Chartered Institute of Personnel and Development (CIPD) together with KPMG.

In a survey of over 700 employers it appears that those employers who plan to make redundancies expect to cut their workforce by 6.2% on average this quarter, compared with 3.8% in the previous quarter. This is against a background of an overall fall in unemployment in the three months to November, with unemployment currently standing at 2.46 million or 7.8% of the workforce.

The net balance of employers in the private sector between those expecting to recruit and those expecting to cut staff is currently negative at -5%. On the other hand, things are much bleaker in the public sector. Here the net balance was -31%, with the public administration and defence sector recording a figure of -62%.

It looks like workers in the public sector will be bearing the brunt of job losses in the months ahead.

According to John Philpott, Chief Economic Adviser at the CIPD: “The UK jobs market is still on the ropes, with a public sector fall in employment now a reality as it feels the impact of the longest recession in modern times.

“Unfortunately, there are more punishing rounds ahead. The private sector will be dealing with ongoing concerns about productivity, wage costs and inflation alongside the spectre of deep public spending cuts. With many private sector companies looking to move jobs abroad in an attempt to find the right balance between skills, quality and cost reduction, the jobs market needs all the continued support and protection it is getting from the government.”

In fact, the Survey shows that outsourcing of jobs is a growing concern. Ten per cent of private sector companies plan to outsource jobs abroad in 2010. Of these, over 50% plan to relocate UK jobs to India, while 37% plan to move jobs to Eastern Europe.

One positive point for inflation and input costs is that pay prospects are extremely subdued. In recent times public sector pay has been rising faster than that in the private sector, but currently the private sector is predicting a rise of 2% compared with 0.9% for the public sector at the next pay award.

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Posted in Earnings, unemployment

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