Employer confidence plunges to new record low

Employers’ confidence in the prospects for the UK economy plunged by 8 percentage points this month to another record low of net: -28, according to the latest Jobs Outlook (Mar 2019) from the Recruitment & Employment Confederation (REC). Confidence in making hiring/investment decisions fell by 6 percentage points to net: -1, taking this measure into negative territory for the first time since REC’s records began in June 2016.

 

However, Unemployment figures lowest for 44 years.....

The latest jobs outlook for March from the REC, goes on to say: -

TOTAL EMPLOYMENT – PERMANENT AND TEMPORARY

The UK workforce was 222,000 (0.7%) larger in November 2018– January 2019 than the previous quarter and rose by 473,000 (1.4%) year-on-year. Self-employed numbers rose year-on-year by 65,000 (1.4%) to 4,839,000 – 14.80% of the workforce. The number of temporary employees also rose slightly, by 4,000 to 1,553,000 (4.75% of the workforce). As to the reasons for temporary employment, 398,000 people (26%) could not find a permanent job, 464,000 (30%) did not want one, 128,000 (8%) were in a period of training/probation and 563,000 (36%) were temporary for some other reason.

UNEMPLOYMENT AND CLAIMANT NUMBERS

The UK unemployment rate fell to 3.9% in November 2018–January 2019, and had not been lower since November 1974– January 1975. At 1,338,000, this represented a 35,000 (2.5%) decrease on the previous quarter and was 112,000 (7.7%) lower than a year earlier. Numbers rose by 9,000 (2.3%) quarter-on-quarter amongst those aged 18–24 but was at the same level as a year earlier. Numbers also rose quarter-on-quarter by 10,000 (3.7%) amongst those aged 50+, although they were 11,000 (3.5%) lower than in the same period last year. At 1,039,000, the provisional Claimant Count in February 2019 rose by 205,000 (24.6%) year-on-year.

REAL WAGE GROWTH

Regular Pay growth (in nominal terms) for employees, for the period between November 2017–January 2018 and November 2018– January 2019, was +3.4%. When considering the change in real- terms (i.e. adjusted for CPI inflation), however, Regular Pay increased by 1.4%. This figure crucially excludes the earnings progress of the self-employed population, however, which represented 14.80% of the UK workforce in this period. At an average of £466 per week, Regular Pay for employees was £8 higher than in the same period last year. It remains £13 lower than the pre-downturn peak of £473, however, recorded in the summer of 2007 and early 2008.

CONSUMER CONFIDENCE INDEX

Despite remaining firmly within negative territory, the Consumer Confidence Index rose by 1 point in February to -13. Three of the underpinning measures improved whilst two remained the same. Whilst respondents’ views on their own personal finances over the next 12 months remained at +1, this was 4 points lower than in February 2018. In contrast, at +5, the Major Purchase index was 5 points higher than a year earlier – and, at +18, the Saving Index was up 6 points, year-on-year.  Pessimism continues about the prospects for the UK economy, however. At -38, the balance of expectation for the general economy over the next year was 12 points lower than in February 2018.