Competition for jobs falls to one year low in July
…but salary squeeze tightens
This month our juicy data reveals that the pay packet squeeze is the dark cloud lingering over a brightening UK jobs market. All other indicators show life is improving for jobseekers. Competition for vacancies is easing, there are more jobs available, and the north-south divide is showing signs of narrowing. But salaries have fallen sharply in real terms. They haven’t kept pace with the relentless march of inflation, which is a major reason why the economic recovery hasn’t been more dynamic.
The Adzuna Job Index reveals there are currently 524,656 live vacancies in UK, up 1.0% over 12 months, demonstrating that the strengthening UK economy is creating more jobs despite the traditional summer slowdown. These figures, in conjunction with the 0.8% increase in average pay June to July, may be broadly positive but the labour market is still showing worrying signs as average wages fell by 3.5% over the past 12 months, currently standing at £33,462 p.a.. In real terms, wages have fallen 6.43% year on year – meaning the average employee in Britain is £2,150 p.a. worse off than they were this time last year.
Where are all the jobs? Competition for jobs has fallen for six consecutive months with an average of 2.7 jobseekers competing for every available vacancy. Six out of the top ten best cities to get a job have less than one jobseeker per vacancy, and these are all in the South of England with one single exception: Aberdeen. Aberdeen is the only bright spark north of the border and the easiest city in which to find a job this month, with just 0.35 jobseekers for every advertised vacancy. Luton, Wolverhampton and Liverpool have experienced the greatest increase in the competition stakes in the six months to July 2013.
Salary growth still tracks below inflation: The past few months have seen growth in average salaries suggesting a wage recovery may be on the cards. However, the continuing fall in average rates of pay remains one of the most worrying parts of the labour market, with those in employment worse off as wage growth consistently tracks below the rate of inflation. Wales is once again the worst paying region in the UK with average advertised salaries in June of £25,172 down 2.9% in the past six months. However, Welsh jobseekers should head to Cardiff where average pay packets have increased by 2% since January 2013. London remains the best paying region in the UK, up £1,044 p.a. to £41k in the last 6 months which, in light of recent of rail fare hikes, is good news for jobseekers planning to commute from neighbouring cities.
Manufacturing, Services and Construction all improving: This month, hiring patterns suggest employers are increasingly convinced the worst of the economic downturn is in the past, most notably in the manufacturing and construction sectors – both vital to the economic recovery. Manufacturing vacancies are higher than this time last year, while construction vacancies are up 9% suggesting output in these sectors will continue to increase. Wages in the IT and Energy & Oil sectors remain immune to the national trend, increasing 7.3% and 3.2% respectively, while wages in Hospitality and HR took a dive.
The latest juicy job market data, the first since Mark Carney’s forward guidance announcement, shows a rather confusing picture. The number of vacancies is on the up (woop!) at the same rate as the size of the workforce causing the unemployment rate to stay the same. We reckon this poses a slight problem for the Bank. The economy may grow over the next few years but unemployment – innately a lagging indicator, especially as measured through the Labour Force Survey – will take longer to come down. Advertised job vacancies and salaries are a much better measure of where unemployment is heading, and a leading indicator on the health of the economy.
Check out previous Job Market Reports here (July 2013, June 2013, May 2013) and don’t forget to follow us on Twitter and Facebook to keep up to date with more exciting news. Also if you need anything data-wise contact us on here. Our resident army of data nerds are always happy to help 🙂