Thursday, 20 June 2013
East Midlands employment set to rise
Employment in East Midlands set to rise by 3.6 per cent by 2018 but wage growth will remain subdued, according to analysis by accountants PwC.
The rise will be the third highest of any UK region.
Entitled Living with Austerity, PwC’s analysis examines the state of the country’s public finances and the options the Chancellor has for spending in 2015/16, as well as the public’s views on these issues.
It also considers how far private sector job gains will continue to outstrip public sector job losses over the period of planned austerity to 2017/18.
As shown in the table below, the Office for Budget Responsibility (OBR) is projecting a further fall in public sector employment of just under 900,000 over the five years to 2017/18.
For jobs in the private sector, there are a number of scenarios based on short and long-term historic trends, but PwC’s central scenario is for around 1.7 million net job gains over this period.
PwC estimates that there will be a net rise in total employment in all regions, with the largest proportional rises in London, the East of England and the East Midlands.
For the East Midlands specifically, the OBR forecasts that between 2012/13 and 2017/18 around 58,000 public sector jobs will be lost and around 133,000 private sector jobs will be created.
Mark Shires, senior partner at PwC in the East Midlands, said: “The East Midlands economy is resilient and has been responding well to the economic situation.
"We have seen good growth in some areas of the private sector, which is boosting job prospects locally. In particular, businesses that have achieved strong growth as a result of their exporting activity are having a positive impact on companies in the local supply chain and to some extent this is helping to offset job losses in the public sector."
John Hawksworth, chief economist, PwC, said: “The official data we analyse in the report shows the young (16-24) have been worst hit so far on jobs, while the rise in employment for the over-50s has been a notable plus from the past three years.
"The latter bodes well for our ability to adjust to an ageing population but it also points to the need for increased investment in measures to boost youth employment such as apprenticeships.”
While the overall number of jobs should continue to rise over the period of austerity, the report notes that (as in the past three years), many of the new private sector jobs may involve part-time or temporary work, while public sector job losses are more likely to be better paid, full-time positions. Together with tight constraints on public pay, this will contribute to continued subdued growth in average real earnings growth over the next 3-5 years.
Three years into austerity measures, and despite recent tentative signs of improvement in the UK economy, a specially commissioned poll of the UK public for PwC showed that their view of the economy remains downbeat.
There is continued support for exemption from cuts for the NHS (67%), schools (54%) and pensioner benefits (67%). However, 60 per cent said international aid should not be protected from future Government.
Mark Shires, added: "There is public support for continued protection of certain areas of public spending and this will make it much harder for any Government to argue the case for removing current ring fences and making cuts in the immediate future.
“However, with growth figures falling short of expectations and public borrowing figures projected to rise, it is clear that politically difficult choices will have to be made.”
George Cowcher, Chief Executive of the Derbyshire and Nottinghamshire Chamber of Commerce, said: "It is encouraging that analysis by a firm of PwC's standing is predicting job growth over the next five years and that the East Midlands should see the third highest growth in the country.
"It shows that the regional economy is heading in the right direction and we welcome that. The figures support our our own research and anecdotal evidence for the short term and we will continue to do everything we can to promote growth across the region."Back