UK Labour Market Update: Vacancies Continue Declining Trend
16 Apr 2024
16 Apr 2024 by Luke Puplett - Founder
Introduction
The Office for National Statistics (ONS) released its latest labour market statistics for the UK, providing insights into the state of employment, wages, and job vacancies. While the overall picture remains mixed, the data highlights a continuing downward trend in job vacancies across the country.
Vacancies Decline for 21st Consecutive Quarter
According to the ONS, the estimated number of vacancies in the UK fell to 916,000 in the January to March 2024 quarter, marking a decrease of 13,000 or 1.4% from the previous quarter. This decline represents the 21st consecutive quarterly drop in vacancy numbers, despite only 8 out of 18 industry sectors experiencing a fall.
While vacancy numbers have been declining steadily, they remain 120,000 above their pre-coronavirus (COVID-19) levels recorded in January to March 2020.
Industry Variations
The decrease in vacancies was not uniform across all sectors. The arts, entertainment, and recreation industry experienced the most significant contraction, with a staggering 18.3% drop in vacancies. On the other hand, some sectors, such as real estate activities and transport and storage, saw modest increases in job openings.
Unemployment and Vacancies
The number of unemployed people per vacancy rose to 1.6 in the December 2023 to February 2024 period, up from 1.4 in the previous quarter. This increase was driven by the combination of declining vacancy numbers and rising unemployment rates.
Employment and Workforce Trends
The ONS data revealed that the UK employment level for those aged 16 years and over declined both on a year-over-year and quarterly basis during the December 2023 to February 2024 period. The employment rate for individuals aged 16 to 64 stood at 74.5%, lower than estimates from a year ago and decreasing in the latest quarter.
On the other hand, the UK unemployment rate for those aged 16 and above increased to 4.2% in the December 2023 to February 2024 quarter, surpassing the levels recorded a year earlier and rising within the latest three-month period.
Wage Growth and Inflation
Average weekly earnings in Great Britain continued to exhibit relatively strong growth, with regular pay (excluding bonuses) increasing by 6.0% annually in the December 2023 to February 2024 period. Total earnings, including bonuses, rose by 5.6% year-over-year.
However, when adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH), real regular pay growth stood at 1.9%, and real total pay growth was 1.6%. These figures highlight the persistent challenge of maintaining purchasing power amid elevated inflation levels.
Sectoral Differences
The manufacturing sector experienced the highest annual regular pay growth rate at 6.9%, closely followed by the finance and business services sector at 6.8%. In contrast, the professional, scientific, and technical sector recorded the lowest annual increase in median pay at 3.0%.
Payrolled Employees and Pay Distribution
According to early estimates from HM Revenue and Customs' (HMRC) Pay As You Earn (PAYE) Real Time Information (RTI) data, the number of payrolled employees in the UK rose by 0.7% or 204,000 employees compared to March 2023. The health and social work sector saw the largest increase, with 172,000 additional payrolled employees over the 12-month period.
The data also revealed disparities in median monthly pay across industries, ranging from £1,234 in the accommodation and food service activities sector to £4,113 in finance and insurance.
Conclusion
The ONS's latest labour market release underscores the ongoing challenges faced by businesses and job seekers alike. While the decline in vacancies may signal a potential cooling of the job market, it also highlights the need for targeted efforts to support industries facing significant workforce shortages and to address unemployment concerns.
Link to the original report at the Office for National Statistics
Labour market overview, UK: April 2024
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