Employment at record high while wages rise at fastest pace in a decade despite Brexit

16 April 2019
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Employment has reached a record high while wages are rising at their fastest pace in a decade, despite ongoing Brexit uncertainty.

Wage growth for the three months to February remains the same at 3.5% including bonuses – but is still outpacing inflation, the Office for National Statistics (ONS) says.

The number of people in work rose 179,000 in the three months to February to reach a new record high of 32.7 million, while the employment rate remained at an all-time peak of 76.1% of the working-age population.

Meanwhile, UK unemployment fell 27,000 to 1.34 million, with the rate of 3.9% the lowest since the mid-1970s.

Total pay, including bonuses was £494 a week, compared with £525 in February 2008, the year of the economic crash.

ONS deputy head of labour market statistics Matt Hughes says: “The jobs market remains robust, with the number of people in work continuing to grow. The increase over the past year is all coming from full-timers, both employees and the self-employed.

“Earnings have now been growing ahead of inflation for over a year but, in real terms, wage levels have not yet returned to their pre-downturn peak.”

Tej Parikh, senior economist at the Institute of Directors, says businesses were continuing to recruit despite the uncertainty surrounding Brexit.

He says: “The elongated period of uncertainty has kept businesses in a hiring cycle. Many firms have lacked the confidence to put funding toward training, technology, and new machinery, which has in turn meant firms need to hire more workers to lift output.

“Without a pick-up in investment, low productivity will also keep wages from growing further, particularly when considering the higher regulatory costs businesses are facing this tax year.

Pawel Adrjan, UK economist at the global job site Indeed, says that while the pace of job creation has risen, vacancies in the retail industry have fallen.

He says: “Britain’s current jobs boom was not made on the high street.

“In many parts of the country, the retail sector has been a passenger at best. Analysis of the hundreds of thousands of jobs listed on Indeed shows the retail industry’s share of vacancies has fallen steadily.”

“Customer-facing retail jobs have been hardest hit as shopping patterns change, and more people do more of their shopping online.”

The number of vacancies was 852,000, 32,000 more than a year earlier.

Mike Cherry, national chairman of the Federation of Small Businesses, says the tight labour market was "yet another headache for small business owners".

He says: "One in five small UK employers rely on staff from the EU. The sharp drop in European arrivals is a real concern for many smaller firms, particularly those in sectors such as construction, care and engineering, where the contribution of EU team members is so vital.

"One in three small firms now say lack of access to the right personnel is a major barrier to growth."

 

Comments

In reply to by anonymous_stub (not verified)

Why "despite" Brexit? Did it enter no-one's head it could be 'as a result of' Brexit?

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