Ross Clark Ross Clark

Is Britain facing a jobs crisis?

The ONS recorded a sharp recovery in economic growth in March. The Bank of England has already increased its forecast for the growth of the UK economy in 2021. Now comes more evidence of rapid growth. The quarterly CIPD/Adecco Labour Market Outlook, published today, shows a sharp rise in the number of organisations that are hiring extra staff or are expecting to do so over the next few months. The survey, which goes out to 1,000 employers in the private, public, and voluntary sectors, found that 36 per cent of employers are planning to increase staff levels over the next three months. Nine per cent said they are expecting to shrink staff levels, 50 per cent will keep numbers the same and 6 per cent don’t know.

The net balance between those planning to increase their staff and those planning to shrink staff levels — 27 per cent — is the highest since the second quarter of 2018. It is a little higher in the private sector and voluntary sectors, at 28 per cent, than in the public sector, at 22 per cent. The sectors where firms are most looking to hire staff are healthcare (a net balance of 54 per cent), information technology (37 per cent), administration and support services (32 per cent), and construction (32 per cent). The sectors with the least lively jobs markets are manufacturing (a net balance of 17 per cent) and utilities (18 per cent).

The danger is that furlough morphs, or has already morphed, into a very expensive form of welfare

The survey does, however, add to worries over inflation. Expectations among employers of increases in pay over the next 12 months have doubled from a median of 1 per cent to 2 per cent. Last autumn, employers in the private sector were expecting no annual increase in pay over the next year at all.

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