institute for employment studies

press information centre

No green shoots in labour market, but not as bad as worst predictions either

17 June 2009

UK labour market conditions continue to deteriorate according to figures released today by the Office for National Statistics. Nigel Meager, Director of the Institute for Employment Studies said:

‘Unemployment is rising and is set to keep on rising. And experience of past recessions tells us that we may need to wait for up to two years after the economic recovery is under way before unemployment starts to fall again. Young people are experiencing particular difficulties, which will intensify over the summer as this year’s school and college leavers enter the labour market. Recent proposals for a “jobs guarantee” for this group, to prevent them drifting into long-term unemployment are, therefore, particularly welcome. However, against this ominous backdrop, it is worth noting that unemployment continues to rise at a slower rate than many had predicted. May’s claimant count increase of 39,300 is smaller than has been seen in recent months.

‘This recession is hitting some sectors more than others. Today’s figures show another 78,000 jobs lost in manufacturing and another 37,000 jobs lost in construction in the first quarter of 2009. This contrasts with education, health and public administration, where there are now 79,000 more jobs. The different experience of public and private sectors is also evident in pay settlements. Comparing the three months to April 2009 with the same months in 2008, we see average pay increases of 3.6 per cent in the public sector compared to only 0.3 per cent in the private sector. This situation is likely to be reversed in 2010-11, however, as the public finances come under intense pressure at the point when the private sector is likely to be emerging from the downturn.’

Further information

Nigel Meager is a labour economist by training, and a well-established international expert on labour market and employment policy issues. Director of the Institute since 2004, he has a long and varied research track record covering the functioning of national, regional and local labour markets, unemployment, skill shortages, labour market flexibility, changing patterns of work and equal opportunity policies and practices.

For further information or comment, contact Nigel Meager or call +44(0)1273 763 445, or the IES press office, or on 01273 763414.