By Daniel Hunter
The number of job vacancies in the UK held steady at 460,493 in May but only because employers are keeping a lid on wages and hiring at low salary levels, according to the latest UK Employment Market Report from Adzuna.co.uk.
The average advertised salary in May was 1.7% lower than twelve months ago, a drop of £571 over the course of year and fell 0.2% month-on-month, currently standing at £33,617 p.a. Taking inflation into account, the real terms drop in salaries is even more pronounced. With CPI inflation running at 2.7% in May, the average advertised salary has fallen by 4.4% (£1,504) in real terms since May last year.
The only regions where average salaries have increased in the past six months are London (+3%) and the South East (+1%). Wales and Eastern England have seen the steepest drop, with average salaries falling by 4% in each region since last November.
“Until last month, job numbers had increased every month this year, which is testament to the resilience of the labour market in an environment where economic growth is anaemic," Flora Lowther, head of research at Adzuna, explained.
"But salaries have paid the price. Rather than making redundancies and freezing hiring, employers are keeping a lid on the wages of existing employees and hiring new staff at lower salary levels. Wages have fallen by over £1,500 in real terms since last May, which indicates a fall in employer confidence.”
Job vacancies in May were up 1.4% from 454,254 in the same month last year, but fell a negligible 0.1% from 460,977 in April.
With the number of Britons in work rising, competition for vacancies is easing. The number of jobseekers per vacancy has fallen from 3.5 in April 2012 to 3.2 in May this year. This ratio has fallen from a peak of 3.6 in February.
There were 1.50 million people unemployed in May, down 2.8% from 1.54 million in April, and down 6.0% from 1.59 million in May 2012.
“Strong UK-wide employment and vacancy levels are camouflaging a number of underlying weaknesses in the labour market. One of those is the health of regional job markets," Flora Lowther commented.
"In some areas, notably the North West, East, and parts of Yorkshire, the labour market is suffering, partly thanks to public sector austerity. In areas like the Wirral — where there are 56 jobseekers per vacancy — the weakness of the private sector means it hasn’t been able to fill the space left by public sector redundancies, which has led to fierce competition for a small number of vacancies.
“The private sector is stronger in southern areas, so has been more resilient to public sector cuts, which is why there are fewer jobseekers and more vacancies.”
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