Posts Tagged ‘Employment’
Monday, September 6th, 2010
Britain’s manufacturers are continuing to report buoyant trading conditions on the back of rising demand in overseas markets, pointing to good prospects for growth in 2010 according to a major survey published today by EEF, the manufacturers’ organisation and BDO LLP.
The third quarter EEF/BDO ‘Manufacturing Outlook’ report reveals that recovery, which began at the end of last year, has been sustained with output and orders balances reaching record levels for the second quarter in succession. This performance continues to be driven by the strength of overseas markets, with new analysis published by EEF showing a close relationship between exposure to export markets and company performance.
Greater confidence across the sector is also continuing to translate into some recruitment, albeit anecdotally this is being driven by temporary or agency working which will give employers flexibility should demand begin to slow.
Uncertainty about future demand had been dampening investment plans, but a number of sectors are now planning to increase in investment. The positive investment intentions posted this quarter breaks the pattern of previous recessions by recovering at an earlier stage in the cycle.
However, the short-term optimism highlighted by EEF’s survey is shaded with a degree of caution about the risks to growth in 2011. As fiscal consolidation really gets underway in the UK and others follow suit, together with the weaker outlook for the US and risks to the sustainability of Asia’s growth path, the recovery could yet falter.
Commenting, EEF Chief Economist, Ms Lee Hopley, said:
“Manufacturers have continued to reap the rewards of growth in overseas markets with the upswing being felt across all sectors and regions. Not only has this continued to translate into better employment prospects but the recovery in investment has begun much earlier in the cycle than after previous recessions.
“However, we have to maintain perspective that the recovery is coming from a very low base and the risks to the economy in the medium term haven’t gone away. The rebound in exports and modest improvement in investment will need to become much more firmly entrenched if we are to see a much-needed rebalancing of the economy.”
 Manufacturing buoyancy has been fuelled by a strong rise in exports. Tom Lawton, Head of Manufacturing, BDO LLP, comments,
“The sector has seen a significant upturn since the dark days of the recession and this quarter’s results show continued growth in output and orders and more expected for the next quarter, mostly driven by the restocking across most sectors of industry and exports.
“This quarter results show more optimism around two key indicators which have been lagging behind the general good news of the sector in recent surveys, being employment and investment. This is excellent news but much more will be needed to enable manufacturing to compete in the space where we have a competitive advantage – innovation, research and development, excellent customer service and fast response to emerging trends.”
Over the last three months, output and new order balances were +33% and +35% respectively, both record levels since the survey began in 1995 which suggests growth in manufacturing output should at least continue into the next quarter.
This growth has been driven largely by export markets (+30%), where Europe in particular turned out to be stronger than expected. Whilst the domestic order balance weakened slightly, the balance of +20% is still above its long term average. Furthermore, growth continued to be broad based across all regions and sectors.
The survey was also notable for two other factors. Firstly, the balance of companies recruiting almost doubled in the last three months to +17%, the strongest in the survey’s history.
Secondly, the investment balance turned positive to +7% for the first time since 2008q2. Compared with previous recessions, where investment balances have tended to lag behind increases in output by over a year, this is a somewhat faster recovery in capital expenditure intentions and signals that companies are becoming more confident to begin investing in plant and machinery.
Looking forward, expectations about future prospects remain positive, with a balance of 27% of companies expecting output to increase in the next three months, and 22% expecting orders to expand. Both of these balances are higher than the previous quarter’s figures suggesting there is confidence that the recovery will continue into the next quarter at least.
EEF also published its latest forecasts for the UK economy and manufacturing. These show the economy growing by 1.5% and 2.1% in 2010 and 2011 respectively whilst manufacturing will grow by 3.7% in 2010 before easing back slightly to 3.2% in 2011.
Tags: Employment, exports, Investment, Manufacturing
Posted in European Union, International Trade, Manufacturing | No Comments »
Thursday, July 29th, 2010
The government has just started a consultation process with the view of scrapping the fixed retirement age from October 2011. This would mean that employers would no longer be able to ‘force’ workers to retire at age 65, as they can, and usually do, at the moment.
The bad news is that you have to have a job in the first place. Unlike the 2.47 million who are currently unemployed in the UK. We should also not forget the 1.08 million who have to take part-time work because they cannot find any full-time employment.
Charities and organisations that have been fighting against “age discrimination” are obviously delighted at the news, as are many older workers who don’t want to end up on the ‘scrap heap’ at age 65.
Although the government will be highlighting this “anti-discrimination” argument, it will have the underlying reason that this move makes economic sense. With a steadily ageing population the demands on the public finances are immense, for support, pensions and health care. With more people being able to work longer, and finance themselves more easily, there will be fewer costs to the exchequer.
Not only that, there will also be more people paying taxes at the same time as they are receiving their state pension, which will boost the economy as well as government finances. The ‘grey pound’ is already a growing part of consumer expenditure and is now set to become even more so.
On the down side, it could be argued that there will be fewer opportunities for younger people to obtain jobs if fewer people are retiring. Some employers feel that the change may add to their costs and that it will make workforce planning more difficult, not knowing the date at which older people will terminate their employment. Some also put the argument that older workers are less productive although there is no evidence to back this assertion. In fact some companies have been deliberately targeting older workers who they feel offer a better interface with customers, than those who are just out of school.
Tags: Age discrimination, ageing population, Employment, productivity, Public Finances, retirement
Posted in Employment, Population, Public Finances, labour markets | No Comments »
Tuesday, July 6th, 2010
The latest Economic Survey from the British Chambers of Commerce suggests that there was continued growth in the second quarter of 0.6% to 0.7%.
The survey, which is based on data collected from over 5,600 businesses throughout the country found that domestic manufacturing sales surged by 29 points in the second quarter to +30% and manufacturing export sales rose by 11 points to +31%. This latter figure is the highest level for four years.
Employment in manufacturing rose 35 points to +19% although services only increased by 1 point to +4%. There was also a big increase in the number of manufacturers reporting pressure on prices.
David Kern, Chief Economist at the British Chambers of Commerce said:
“The UK’s economic recovery is consolidating, and these results support the view that GDP growth strengthened in the second quarter of 20-10. However, the recovery is fragile and is not yet secure.
“Despite an improvement in manufacturing, the sector still faces serious risks. Given the sector’s poor long-term historical record, it is much too early to conclude that we are now seeing a sustainable manufacturing upturn. The service sector, which accounts for the bulk of GDP in the UK, is not recovering at an adequate pace and this heightens the threat of an economic setback.
“This quarter’s poor cash flow data, in both manufacturing and services, indicates that many businesses are still facing serious financial difficulties. Investment and confidence levels remain disappointing across all sectors.
“Many of the factors driving growth this year, mainly stock building and the continued effects of the policy stimulus, are only temporary. As a result, the threats of a relapse remain serious, and countering these threats to growth must remain a priority for policymakers.”
Tags: economic growth, Employment, GDP, Manufacturing, Pricing, services
Posted in Employment, GDP, Manufacturing, Pricing, Service Sector, economic growth | No Comments »
Thursday, June 17th, 2010
The unemployment rate for the three months to April 2010 was 7.9% which was an increase of 0.1%. There was an increase in the number unemployed of 23,000 to give a total of 2.47 million out of work. This is a bleak figure which looks set to become even bleaker. Particularly so, given the fact that there are 5.2 unemployed people per vacancy at the moment.
On the other side of the coin, the number of people claiming Jobseeker’s Allowance (also called the claimant count), actually fell by 30,900 between April and May to reach 1.48 million. This is the first time this measurement has fallen below 1.5 million since March 2009. This may be because more people are being put on training courses and some of those who are losing their jobs may not be eligible for Jobseeker’s Allowance.
Also, according to the ONS, the number of people who are economically inactive, which means that they are out of work but not seeking employment, actually increased by 29,000 during the three months to April. This means that the total of the economically inactive has now reached 8.19 million which is equivalent to 21.5% of the working population.
At the same time, there was a small increase of 5,000 in the numbers employed in the three months to April. But, the number of full-time workers fell by 56,000 over the quarter whilst the number of part-time workers increased by 61,000. The number of those working part-time because they cannot find a full-time job rose by 45,000 over the quarter, and now totals 1.08 million, which is the highest figure since comparable records began in 1992.
The employment situation is a mess and about to get worse. The government’s austerity cuts are already biting. Just yesterday, one of my friends lost her job in education, because “funding has been cut for next year” within the local authority. Of course, the more public sector workers lose their jobs the lower government spending will be on the surface. But then there are all the unemployment benefits which will have to be paid added to the loss of income tax and national insurance which the out-of-work will no longer be paying.
With growth figures being slashed, we are not going to be rescued by the private sector, especially as other governments, especially in Europe, are taking the same sort of austerity measures. If markets dwindle, employment will fall even further. I had a job application this morning from someone who has a “starred” First Class degree and is currently working as a waiter. Your guess is as good as mine as to where it is all going to end.
Tags: Employment, Public Finances, unemployment, unemployment rate
Posted in Employment, Public Finances, economic growth, government borrowing, government spending, unemployment | No Comments »
Thursday, May 20th, 2010
Between 2000 and 2009, employment in the agricultural sector in the EU27 fell by 25%, which was the equivalent of 3.7 million full-time jobs. It fell by 17% in the EU15 (those countries in membership before 2004) and by 31% in the 12 member states (NMS12) that joined the EU in 2004 and 2007.
In 2009, total employment in the EU27 agricultural sector was equivalent to 11.2 million full-time jobs, of which 5.4 million were in the EU15 and 5.8 million in the NMS12.
 Agricultural employment is falling rapidly in the EU. Between 2000 and 2009, real agricultural income per worker increased by 5% on average in the EU27 according to figures just released by Eurostat. But this average is rather misleading. The new member states gained immensely with incomes in the NMS12 rising by 61% whereas incomes in the EU15 actually fell by 10%.
The Common Agricultural Policy has always been something of a problem to UK governments as such a large percentage of total EU expenditure has gone into agriculture in the past. Since the UK has a small but highly efficient agricultural sector, this has not usually been to our benefit.
What is particularly interesting according to the latest figures, is that five EU countries account for nearly two-thirds of all agricultural employment in the EU27. Poland accounts for 20%, Romania 19%, Italy 10% and Spain and France both 9%.
However, the EU did resolve in 2008 to make changes to agricultural policy and the plan is to continue to reduce direct payments to farmers and to transfer the money saved into a fund for the development of rural regions.
The proportion of the EU budget devoted to the CAP has fallen from a peak of nearly 70% in the 1970s to 34% over the 2007-13 period. This is partly due to the expansion of the EU in other directions, cost savings from reforms plus the new focus on rural development which will be allocated 11% of the CAP budget over the 2007-13 period.
Tags: Agriculture, Common Agricultural Policy, Employment, European Union
Posted in Agriculture, Employment, European Union | No Comments »
Thursday, May 13th, 2010
The unemployment rate was unchanged at 8.0% in the three months to March 2010. But the number of unemployed increased by 53,000 over the quarter to reach 2.51 million. This is the highest figure since the three months to December 1994.
Figures were also published by the Office for National Statistics yesterday to show that the number of people classed as economically inactive, that is those out of work and not seeking work, has risen by 88,000 to reach 8.17 million. This is the highest total since records began in 1971 and includes students, those acting as carers for relatives and those who have simply given up seeking work. There has doubtless been an increase in the number of discouraged workers who have simply given up looking for a job in the current climate.
There are also an increasing number of people who have been unemployed for 12 months or more. This figure increased by 94,000 over the quarter to reach 757,000 which is the highest figure since the three months to May 1997. Given that the number of people out of work for up to six months actually fell by 52,000 this suggests that we have nearly three quarters of a million long-term unemployed who are finding it virtually impossible to get back into the job stream. This is probably due to a mismatch of skills compared to current demands by businesses.
Whilst the Labour Force Survey measure of unemployment shows a worsening picture, the number of people claiming Jobseeker’s Allowance, also known as the claimant count, continues to improve. This has now fallen for the last three months and for five out of the last six months, and between March and April fell by 27,100 to reach 1.52 million. These falls could be due to the active government initiatives to place the unemployed on training courses.
The employment rate for the three months to March 2010 was 72.0% which was down 0.3% on the quarter and was the lowest level since the three months to September 1996. The number of people in employment fell by 76,000 on the quarter to reach 28.83 million.
There was a fall in the number of full-time workers of 103,000 while the number of part-time workers rose by 27,000 over the quarter. The number of people who are now working part-time because they cannot get full-time work increased by 25,000 over the quarter to reach an amazing total of 1.07 million, which is the highest figure ever recorded. This shows the extent of underemployment within the economy, but also its flexibility, which has meant that the headline unemployment figure is much better than it could have been.
Comparatively, the UK’s unemployment rate of 8.0% is superior to many other nations. The OECD average for March was 8.7% whilst the EU recorded 9.6% and the euro area was 10.0%. Other significant figures show the rate in Ireland at 13.2%, Spain at 19.1% and the US at 9.7%,
Bad news in the short term is that the number of job vacancies fell by 6,000 to 475,000, which is the first quarterly fall since last autumn. In addition, public sector employment rose by 7,000 in the last quarter of 2009, whilst private sector employment fell by 61,000. So, at a time when Gordon Brown was talking about the need to curb public sector employment it was growing to 6.1 million. I’m sure the new coalition government will have something to say about that.
Tags: Employment, job vacances, long-term unemployment, underemployment, unemployment
Posted in Employment, unemployment | No Comments »
Thursday, April 22nd, 2010
The latest unemployment figures take a bit of unravelling. The headline figure for the three months to February, using the Labour Force Survey measure, was up by 43,000 over the quarter to reach 2.5m. This is the highest figure since 1994. This gave an unemployment rate of 8.0% which was up 0.1% on the previous quarter. This is bad news.
However, the number of people claiming Jobseeker’s Allowance, which is also known as the claimant count, actually fell by 32,900 between February and March 2010 to reach 1.54m. This is a bigger fall than anticipated and this measure of unemployment has now fallen for four out of the last five months. This is good news.
 Are things getting better or worse in the UK labour market? So, how then do we reconcile two figures which are moving in opposite directions. It seems that one major factor to the fall in those claiming Jobseeker’s Allowance is that a number of new training schemes have been put in place which are particularly aimed at young people, and which are at least temporarily, keeping them off benefits. Thus, they cannot be unemployed whilst they are being trained. In fact, official figures show that the number of people on government training and employment schemes has increased by 12,000 or 11.2% in the three months to February.
The question is, when the training is over will there be any jobs available? I have already blogged this week about the possibility of a jobless recovery and given the upcoming cull in the public sector it would appear that unemployment will rise further over the next year or so.
An additional factor which would back this up is the fact that there are now 1.05 million people working part-time – because they could not find a full-time job. This number increased by 13,000 over the past quarter. We therefore have a major problem of underemployment.
The significance of this is that these people are now classified as ‘employed’, and it may be as the economy picks up that they will get the first opportunity to move into full-time jobs as the companies they work for start to expand. But as they work more hours they will still just be amongst the already ‘employed’. The point being that the labour market could expand fairly quickly without reducing the unemployment figures.
So, the future changes in the labour market are going to be difficult to call. One positive note is that the number of vacancies for the three months to March 2010 was up 9,000 over the quarter to reach 475,000.
Finally, average earnings figures were also published yesterday. These show that the annual growth rate for regular pay, excluding bonuses, was 1.7% for the three months to February 2010, up from 1.5% in the three months to January. But, what continues to astound, is the difference between the private and public sectors.
When bonus payments are excluded, which mainly apply to the financial sector, growth in private sector average earnings stood at 0.9% compared to a whopping 3.9% for the public sector. Mr Brown is obviously being very generous to government servants, but the day of reckoning cannot be far off.
Tags: average earnings, Employment, private sector, public sector, underemployment, unemployment
Posted in Earnings, Employment, labour markets, unemployment | No Comments »
Wednesday, April 21st, 2010
“The recovery is underway but it will not be strong enough to bring the millions of new unemployed back to work” according to OECD Secretary-General, Angel Gurria, in a meeting with G20 labour ministers in Washington yesterday.
According to Gurria the major policy challenge is to balance two apparently contradictory needs: to tackle unacceptably high unemployment and simultaneously reduce unsustainably high fiscal deficits. “We expect 1.9% average GDP growth in the OECD area for 2010 and 2.5% for 2011. Much of the recovery is still policy-driven; but this can’t go on for long.”
“The OECD average fiscal deficit is close to 10% of GDP, while public debt is expected to reach 100% of GDP by 2011 (30 percentage points higher than before the onset of the crisis). Even if consolidation were sufficient to bring public budgets back to balance by 2017, debt-to-GDP ratios would still exceed pre‑crisis levels in most countries.”
 Will the recovery be sustainable initially with little increase in employment? On top of this OECD estimates also suggest that OECD countries may have lost over 4% of their output potential as a result of the crisis; half of it because of higher unemployment.
It is also felt that even in those countries that managed to contain job losses by widespread cuts in working hours, the short-term labour market outlook is not rosy. They face a serious risk of a “jobless recovery” because firms have ample margin to respond to the increase of demand by raising working hours before they start hiring new workers in large numbers again.
Gurria suggests three priorities. “First, support for labour demand needs to evolve from preserving jobs to jumpstarting job creation. Second, effective re-employment services, combined with adequate safety nets, have a key role to play in promoting a quick reintegration of jobseekers into jobs, while fighting poverty. Third, policies to prevent a “lost youth generation” are a must.”
Tags: Employment, hours worked, recovery, youth unemployment
Posted in Employment, OECD, unemployment | No Comments »
Monday, April 12th, 2010
The current Labour government has put in place plans for a rise in National Insurance contributions (NICs) from April 2011 of 0.5% on employees and 0.5% for employers. Obviously, if Labour says ‘left’ the Tories have to jump and say ‘right’ and vice versa. Well, we can only expect this during an election period, although it is pretty much a common occurrence most of the time. This overall 1% increase is expected to rake in an extra £8bn in tax.
But, what is the significance of national insurance and will an increase result in fewer jobs?
It is estimated that during the 2019-10 financial year which has just ended, NICs will have raised £94.9bn compared with receipts from income tax of £134.1bn, VAT of £67.2bn and corporation tax of a relatively miserly £33.4bn. This is according to figures published by HM Revenues and Customs last month.
 Will the government's planned increase in national insurace cost jobs? This has led the Tories to make a proposal which would cancel most of the proposed rise in NICs and reduce the increase by £5.6bn. This policy has been supported by over 100 UK business leaders who have complained that the Labour policy would amount to nothing less than a tax on jobs. In an interview with the Guardian, Vince Cable, Lib Dem treasury spokesman said: “I just find it utterly nauseating – all these chairmen and chief executives of FTSE companies being paid 100 times the pay of their average employees lecturing us on how to run the country.”
Whilst it is true that NICs are a payroll tax it does not mean that it is in fact a tax on jobs. Does it really mean that fewer employees will offer themselves for work if they have to lose another 0.5% of income? Would they resign if it was income tax being raised by the same amount and not NICs? Would it be true that firms will put their expansion plans on hold if their costs went up another half a per cent as employers? I find this a very doubtful proposition.
It should also be borne in mind that over 6 million Britons now work in the public sector. Who is paying their wages and NICs? No clues here! So the government will actually be increasing their own employment costs and reducing the potential effect of the rise in NICs.
According to Tory plans they are expecting to cut £12bn in government spending this financial year and will use nearly half of that to curb the rise in NICs. But surely we are supposed to be cutting the government borrowing requirement not offsetting the effect of planned cuts. And this is where the whole argument comes full circle. If the Tories are planning to make even bigger efficiency savings within government departments this means that they will be buying fewer computers; less paper and paperclips; not so many chairs, etc, etc.
This means the companies making the computers, paper clips and chairs will sell fewer of their products. This may lead to lower profits and lower corporation tax. Also, they may have to cut back on their workforce!!
Basically, any cutbacks in government spending or increases in taxation could be considered a ‘tax on jobs’ but there is no reason why a rise in NICs should be singled out. Given that the OECD has just said that they expect the UK to grow faster in the middle of this year than many of the other major economies, the chances are that employment might rise rather than fall anyway so the question will never arise.
Tags: corporation tax, economic growth, Employment, government borrowing, government spending, income tax, national insurance, public sector employment
Posted in Employment, Public Finances, economic growth, government borrowing, government spending, labour markets, macroeconomic policy | No Comments »
Friday, March 19th, 2010
The industry body Oil & Gas UK recently published its annual forecast of offshore oil and gas exploration and development activity in the UK, based on a survey of the spending plans of over 70 companies.
It revealed that the number of offshore oil and gas projects currently under consideration for development has risen sharply over the last 12 months, showing that there is still life in the UK oil and gas fields. However, the survey shows that reserves being developed or in production have declined, as possible new projects fail to meet companies’ economic criteria. This, according to the report, highlights continuing concern about the UK’s ability to attract the necessary investment to maximise the recovery of its oil and gas resources.
 The UK's own oil and gas production still has a major role in energy supply. Oil & Gas UK believes that up to 25 billion barrels remain to be won from the UK continental shelf. Business plans developed over the latter half of 2009 have identified up to 11 billion barrels of oil and gas in new and existing projects, a 15 percent increase over 2008 and requiring total capital expenditure of £60 billion. Provided this investment can be secured, the industry could still be delivering 1.5 million barrels of oil and gas per day in 2020, enough to satisfy half of total UK demand.
The industry faces two challenges in this. Firstly, time is not on its side: if the infrastructure needed to maximise recovery is to be preserved, £25 billion capital spend must be delivered within the next five years.
Secondly, the UK’s proven reserves in existing and sanctioned projects currently stand at 5.25 billion barrels, down from 6 billion barrels in the last survey, while those classed as ‘probable’ or ‘possible’ which have not yet attracted investment approval, increased by 60 percent to around 6 billion barrels. How long the UK continues to operate as a significant oil and gas province will depend, crucially, on its ability to convert its discoveries into ‘proven’ reserves while at the same time ensuring a healthy crop of possible new developments are brought into company plans through steady exploration.
Mike Tholen, Oil & Gas UK’s economics director and author of the report, said: “The increase in the number of new UK oil and gas developments under consideration is, on the one hand, encouraging. It confirms our belief that the province, whilst mature, has decades still to flourish. This is a high technology industry and companies have developed and continue to deploy the best and most advanced technology to unlock the UK’s oil and gas resources. However, even that is not proving enough, illustrated by the production decline and falling investment seen over recent years. Things are made no easier by the fall in wholesale gas prices which have halved over the last year.”
The UK produced 2.48 million barrels of oil and gas a day in 2009, down 6 percent on 2008 and reflecting the 20% slowdown in capital expenditure since 2006. However, Oil & Gas UK believes investment could pick up in 2010, even rising above £5 billion from £4.7 billion in 2009.
The report notes that the industry can help the UK as it emerges from the current recession, contributing £7 billion in production taxes (equal to 20% of total UK corporation taxes) and supporting employment of around 450,000 people across the UK (approximately 45% of them in Scotland). It remains the UK’s largest industrial investor, spending a total of £12.3 billion in exploration, development and production operations.
Tags: Employment, energy supply, Investment, north sea oil
Posted in Energy supply and security, Oil, UK industry | No Comments »
|
