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Private sector employment improves

Fewer employers are expecting to make staff redundant in the coming months, according to a new survey.

Deterioration in UK job prospects is starting to slow this summer as private sector demand for staff is stabilising following a surge of redundancies earlier in the year.

This is the key finding of the latest quarterly CIPD/KPMG Labour Market Outlook (LMO) survey, results of which are published today.

However, signs of improved employer optimism in the private sector are offset by mounting pessimism in the public sector.

The summer 2009 LMO survey finds a negative balance of -10 per cent between the proportion of employers expecting to employ more staff (in the three months following the survey) and the proportion expecting to employ fewer staff. This compares with a negative balance of -19 per cent in the spring quarter.

Dr John Philpott, Chief Economist at the CIPD said: “When it comes to the immediate jobs outlook, the best that can be said is that things are getting worse more slowly. Employment will keep falling and unemployment is still on course to top 3 million in 2010. And it is far too soon to rule out another avalanche of private sector redundancies later in the year.

“While pay restraint or cuts in hours of work has helped save many jobs that might otherwise have been lost during the recession, holding onto staff when order books are far from healthy pushes up unit labour costs and eats into company profits. This can’t be sustained indefinitely – a weak economic recovery, let alone a double dip recession, might well cause many employers to reassess current staffing levels before too long.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .