Maintaining the private sector motor

There’s a lot of economic speculation swirling around the Westminster washbowl at the momment, but little of it is as eyecatching as today’s report from the Chartered Institute of Personnel and Development. Its finding that a third of employers are expecting to cut jobs in the next quarter is bound to spark double-dip fears, even if that expectation is more keenly felt in the public sector than in the private. 36 percent of public sector employers foresee job losses, against 30 percent in the private sector. Perhaps more worryingly, both sectors are expecting more redundancies than they did in last quarter’s report.

Look below the headline figures, though, and there are signs that the private sector is driving on ahead regardless. The CIPD’s index puts private companies on a defiant +19, suggesting that they are quite willing to hire overall. Whereas the public sector is stuck on -35. Numbers like those are strongly remiscent of last week’s employment data from the US, which showed 202,000 public sector job losses across the last three months, and 71,000 private sector gains. Ezra Klein described that outcome as “bad news for jobs, but tepidly good news for recovery” – and something similar might be said of this report today. It is the private sector which will motor us into sustained growth, so any advances it makes are to be welcomed.

But the coalition had best remember that, sometimes, the motor needs oiling. If the private sector is to pull the entire economy along with it, then issues such as the availaiblity of credit to businesses need resolving sharpish. An encouraging sign on that front, then, that a new taskforce expects to report back in October.