3 minute read
Economy
Job market remains resilient as lockdown restrictions ease
A fall in the unemployment rate and a jump in the number of available vacancies has highlighted a resilience in the UK jobs market as coronavirus lockdown restrictions ease.
Latest figures from the Office for National Statistics (ONS) show that job vacancies hit their highest level since the start of the pandemic as employers start hiring again.
There were 657,000 vacancies in the three months to April 30 – a rise of around 48,400 on the previous quarter. Meanwhile, the unemployment rate fell slightly to 4.8% in the three months to March, down from 4.9% in February. Following a period of employment growth and low unemployment, since the start of the pandemic employment has generally been decreasing and unemployment increasing. However, the ONS said the latest figures show signs of a recovery. Suren Thiru, head of economics at the British Chambers of Commerce (BCC), said: “The decline in the unemployment rate and the rise in payroll employment is further confirmation that the UK jobs market is now more resilient to the ongoing restrictions. “Continued government support and the easing of restrictions as the UK moved to step two of the government’s roadmap helped drive higher payroll employment in April. “The rise in the number of job vacancies points to an encouraging upturn in demand for labour amid the gradual reopening of the economy and the strong vaccine rollout. “UK unemployment remains on track to peak at a much lower level than in recent recessions. However, the squeeze on business cashflow from any marked delay to the planned full reopening of the economy may trigger renewed job losses, particularly when furlough becomes less generous over the summer. “The economic scarring caused by coronavirus may drive a two-track jobs market recovery, with strong demand for labour in sectors where activity rebounds quickly, but with young people now entering the workforce and those whose lost their job during the pandemic at particular risk of longer-term unemployment. “More interventions are likely to be needed to support the UK jobs market, including extending the kickstart scheme to help protect young people from the risk of displacement from the labour market.” The labour market figures come after it emerged that the UK economy shrank by 1.5% in the first three months of 2021. However, the third month of the quarter saw a 2.1% rise as lockdown restrictions began to ease – bringing hope that, finally, a corner has been turned. Suren Thiru said: “While the UK economy contracted in the first quarter, the downbeat headline figure masks a renewed momentum through the quarter from January’s drop in output to an exceptionally strong March outturn as lockdown measures started to ease. “The decline in economic output in the first quarter largely reflected the squeeze on activity from coronavirus restrictions, which was partly offset by growing business resilience to those restrictions and a boost from the reopening of schools in March. “The first quarter decline should be followed by a robust rebound in the second quarter as the effects of the release of pent-up demand are fully felt. “However, with the longer-term economic damage caused by coronavirus likely to increasingly weigh on activity as government support winds down, the recovery maybe slower than many, including the Bank of England, currently predict.” “While the UK economy contracted in the first quarter, the downbeat headline figure masks a renewed momentum through the quarter from January’s drop in output to an exceptionally strong March outturn as lockdown measures started to ease.”
