UK jobs outlook remains uncertain

Employment prospects in the UK continue to improve, but growth is slow and

confidence has not yet returned to pre-September 11th 2001 levels, according

to Manpower's Quarterly Survey of Employment Prospects. The service and financial sectors are particularly depressed, providing further evidence of a lack of business confidence.

"Employment prospects are up 3 points on last quarter and are the strongest

this year, but are still down 2 points year-on-year and at their lowest

level for the fourth quarter since 1995," said Iain Herbertson, Manpower's

UK managing director. "All sectors and regions we survey are planning to

increase staffing levels, but not at the pace we were expecting, given the

underlying strength of the UK economy and flexibility of our labour market,

both of which support work creation."

The Manpower survey asks over 2,000 UK companies, split into 11 regions and

21 industry sectors, if they expect an increase, decrease or no change in

their staffing levels for the quarter ahead. For the fourth quarter, 28%

said they would be increasing staffing levels; 10% expect to decrease

staffing levels; leaving a 'net balance' of 18% planning to take on new

staff.

High street retailers are anticipating a 34% increase in jobs for Q4, but a

closer look shows that prospects in the sector are in decline. This time

last year, the sector was top of the league table, when 65% of employers

predicted staff increases in the fourth quarter. That number is down 32

points (the steepest fall of all the sectors) and is at its lowest Q4 level

for the last 10 years. "Christmas is the busiest time of the year in the

high street and quarter 4 is traditionally a time when lots of new jobs are

created here. Prospects are up for the fourth quarter this year, but not at

the level we would expect for this time of year, indicating that retailers

are bracing themselves for a fall in consumer spending." comments

Herbertson.

Employment trends in Hotels & Restaurants add weight to a view that consumer

confidence - or at least business confidence in consumer spending - may be

waning. The sector had shown a strong recovery from the foot and mouth

crisis and the impact on tourism of September 11th, and was the most buoyant

sector for jobs in the third quarter. But it has suffered the greatest

quarter-on-quarter decrease - falling by 20 points from a net balance of 41%

to 21% - and second largest year-on-year decrease of any sector.

The Health sector is the UK's strongest for jobs, with 38% of employers

planning to increase staffing levels in the period October-December. Job

prospects are up 13 points year-on-year and have reached a 10-year high for

Q4. Prospects in Manufacturing are also improving, up 3 points on Q3. But

services, although also up 3 points since the last quarter, are down 9

points year-on-year.

Employment prospects in other sectors are mixed. The Electronics sector,

which had been in decline until last quarter, continues to recover, with 17%

of companies expecting to take on more staff in quarter 4. Education, which

predicted cut backs in the third quarter, is expecting to take on staff in

the fourth (net balance of 9%). Transport expects the largest

quarter-on-quarter increase, up 19 points to a net balance of 27% of

companies planning to hire. Much of this is likely to be down to a

recruitment drive for drivers, to fill the estimated 40,000 vacancies in the

UK driving industry.

Media & Sport and Financial have the worst job prospects, well below the

national average of 18%, with only 4% and 5% of companies respectively in

these sectors expecting to take on staff. Prospects in Media & Sport had

rallied in the last quarter, most likely buoyed by activity around the World

Cup and Commonwealth Games. Employment prospects in the Financial sector

remain poor, with continued uncertainty in the markets.

Around the country, all regions plan to take on more staff in the fourth

quarter. However, although 8 of the 11 regions are displaying greater

optimism than last quarter, only 4 of the 11 are more optimistic now than

they were a year ago.

The North-West is at a 10-year high with 22% of companies planning to take

on more staff. The region shows the greatest year-on-year increase in the

UK. The North East is up by 7 points quarter-on-quarter, but down 16 points

year-on-year. London, which has been hit hardest of all the regions by the

events of 2001-2, is showing signs of recovery, up quarter-on-quarter and

year-on-year, with 15% of companies planning to hire. Manpower has seen

strong growth in public sector prospects in the policing, education,

immigration and probationary service areas, which reflects government

spending.

Other strong regions include the West Midlands, with 27% of companies

planning to take on staff making it the strongest region; Wales, which

reports a balance of 26% of companies planning to hire; the South East and

East, both with a net balance of 18%. However, Scotland (10% net job

gains), the South West and Yorkshire & Humberside (both 14%) all remain

cautious.

"A huge amount of uncertainty remains in the labour market. Our customers

are telling us that they are busy, but they still feel nervous about adding

to overhead, which makes flexible staffing solutions a useful option." says

Herbertson.