Manufacturing jobs rise may not be sustained, says EEF

JobCentrePlus300New labour market data shows the rate of unemployment falling to its lowest for almost a year and employment rising, not least In manufacturing where the number of jobs was up 0.4% in the second quarter of the year.

Data from the Office for National Statistics showed the rate of UK unemployment falling to 7.7% over the quarter while the number of people unemployed dropped by 24,000 and is more than 100,000 down on a year ago.

However, the manufacturers’ organisation EEF says the future for jobs in the sector remains uncertain.

A blog from the organisation’s Felicity Burch commentating on the latest figures contends that future prospects depend on why companies were taking on employees when output growth was weak. “Some manufacturers took on new employees as an alternative to investing,” she says. “Companies that want to increase production may choose to hire new employees instead of investing in capital equipment. This may go some way to explaining recent falls in productivity in the sector.”

She concludes that If companies were taking on employees as an alternative to investment when demand was uncertain, an improvement in the economic outlook would not necessarily imply that employment will increase.

Burch points out that EEF’s latest business trends survey indicated that manufacturers were expecting recent increases in demand to continue and while they intended to add jobs, investment intentions hit their second-highest level in the survey’s history.

“This may signal an imminent shift towards a greater reliance on capital over labour when it comes to increasing capacity,” she says, adding that, “as a result, we expect employment in manufacturing to fall very slightly this year.

This material is protected by copyright Ken Hurst 2013.

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About Ken Hurst

Ken Hurst began his career as a journalist in London over 30 years ago, working on a range of publications before moving on to weekly newspaper production in the newly-independent Zambia of the 1970s. He returned to the UK where his work included spells on newspapers and magazines, before moving to head up Norwich Union’s corporate affairs division. In the 1990s he moved on to freelance, co-own and publish the B2B audio magazine Sound and front the BBC radio Yesterday’s Papers programme. There followed six years as Business Editor at Britain’s biggest selling regional daily newspaper, The Eastern Daily Press, where he led an award-winning team and for whom he still writes a weekly socio/political comment column. Subsequently, he was Group Editorial Director at CBM, responsible for its UK and US magazine output – including The Manufacturer magazine – research-driven industry reports and live events content. Currently he is Contributing Editor at Works Management magazine publisher Findlay Media and Chairman of the consumer publishing house TNT Multimedia Ltd. He is a Fellow of the Royal Society of Arts and of the British Association of Communicators in Business.
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