New 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.