By Marcus Leach
Unemployment figures published on Wednesday by the Office for National Statistics (ONS) have shown a rise of 27,000 to 2.53 million in the number of people out of work in the three months up until January.
Kevin Green, the Recruitment and Employment Confederation’s (REC) Chief Executive, believes the private sector will struggle to absorb the loss of jobs in the public sector.
“There have been positive signs of improving employer confidence and increased hiring activity in many sectors," Green said.
"However, today’s figures confirm that the private sector is some way off being able to absorb public sector job cuts.
“The continuing rise in the number of people seeking work is what we predicted and we expect this trend to continue over the spring, summer and autumn before starting a slow decline at the end of this year and into 2012.
“The onus is now on the Chancellor to announce measures in the Budget next Wednesday which will stimulate the economy and generate job creation. Today’s figures highlight the urgent need for the Chancellor to deliver a meaningful Budget for jobs.
“The real scandal still remains the number of young people not in work or education. The REC’s own Youth Employment Taskforce is reconvening again tomorrow (Thursday) to discuss what can be done to encourage the Government to make this a top priority and to better harness the contribution of employers through apprenticeships, internships and other initiatives.”
Elsewhere the figures released were met with a mix of optimism and pessimism by the Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD).
“The mixed picture of the UK labour market conveyed in the latest official figures offer room for both optimism and pessimism," Dr John Philpott said.
"The headline rise in unemployment suggests that the labour market weakened at the turn of the year, well before the impact of the Coalition Government’s spending cuts and tax rises start to take full effect. Indeed, figures showing that public sector employment had already fallen by 123,000 in the year to December 2010 suggest that the eventual cull of public sector jobs by 2015 could be considerably higher than current Office for Budget Responsibility estimates suggests.
"However, figures showing more people in work in the private sector, including in manufacturing, and fewer on welfare benefits offers hope that the labour market might withstand the economic headwinds better than previously expected.
“On balance the latest jobs figures probably offer more to the optimist than the pessimist, and indicate that the labour market is nowhere near suffering any kind of meltdown. Nonetheless, at the start of 2011 the CIPD cautioned that the official jobs data would be difficult to interpret in the first few months of the year since our own independent survey evidence showed a pick-up in demand for labour toward the end of 2010 followed by a further dip in the first quarter of this year. For the time being therefore the CIPD still expects headline unemployment to reach 2.7 million by the end of 2011 and continue to rise into 2012.
“On the theme of caution, the CIPD repeats its call from earlier in the week for commentators to acknowledge the distorting effects of 16-24 year olds in further and higher education on the headline rate and level of youth unemployment. 1 in 8 young people in this age group are unemployed and almost 30% of those classified as unemployed are full-time students. The UK is experiencing a serious youth unemployment problem which requires an appropriate policy response but talk of a ‘lost generation’ of jobless young people does not aid sensible debate over possible solutions.”