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The UK Productivity Puzzle - What To Expect From The UK's Job Market In 2016
17-Feb-16
February 2016, Recruitment Matters Magazine by The REC

The Office of National Statistics (ONS) showed that the employment rate in the UK to be the highest since records began in 1971, currently standing at 73.9% of the UK population. In addition to this the number of job vacancies is at a record high of 747,000, good news for job hunters, not so for organisations chasing an ever dimensioning talent pool.

Despite this, the UK economy is still facing a fundamental challenge – poor productivity. In comparison to the G7 the UK productivity gap for goods and services is the largest since 1991. Despite this gloomy picture the ONS reported growth of 0.9% from Q1-Q2 in 2015, modest but nonetheless growth. The International Festival for Business (IFB) believe that this may be the start of a dramatic turnaround with regards to productivity levels, predicting the UKs productivity will rise by 10.7% by 2020. 

Most notably this report suggests the manufacturing sector needed a much needed growth of 15.5% to remain competitive, on the back of 0.5% falls in the spring of 2015.

Not all the research shows positive signs however, the Resolution Foundation (RF) warns that the UK productivity needs to improve drastically in the coming year so that the country can maintain its real term pay growth at 2.5%. If this fails to happen we could potentially see inflation rising and therefore real pay growth would be reduced to 1%,  leaving the UK’s workers waiting longer for increased levels of pay and additional spending power enjoyed prior to the economic crisis of 2008/9.

In summary the key to securing the UK economic recovery will come down to improving productivity, specifically in key areas such as manufacturing. It is therefore important that recruitment firms, employers and the government work together to build upon the encouraging signs and invest in vital skills to support the future of British workers.

See the the whole magazine as a pdf file below


https://www.rec.uk.com/__data/assets/pdf_file/0008/281159/Recruitment-Matters-February-2016.pdf