CIPD report shows buoyant manufacturing sector

Posted on 18 May 2011 by The Manufacturer

The Labour Market Outlook published by The Chartered Institute of Personnel and Development has shown manufacturing to be among the main strengths of the UK’s economic recovery.

While the private sector is taking on some of the burden of redundancies, the growth is relatively small and is being cancelled out by rising job losses in the public sector. Included in the survey is the prediction that pay inflation may pick up over the next year, with average pay award expectations across all sectors rising to 1.7% from the 1.3% recorded last quarter.

The manufacturing sector is picking up a lot of the slack. The Labour Market Outlook net employment index, which measures the difference between the proportion of employers that intend to increase total staffing levels and those that intend to decrease total staffing levels in the first quarter of 2011, shows that the public sector has a rating of -52, while manufacturing scores +41.

The report’s twelve-month index, which gives a longer-term perspective on recruitment and redundancy intentions, has risen to -3 from -9 since the previous report. Despite this slight improvement, the number of organisations planning to make redundancies has risen to its highest level (39%) since the survey began in 2004, with more than half of public sector organisations (56%) planning redundancies in the second quarter of 2011. More than a quarter of private sector firms (29%) are also making redundancies.

Gerwyn Davies, public policy adviser at the CIPD, said: “The jobs market appears to be taking baby steps on the long path to pre-recession levels. There are many sectors, such as manufacturing, that are taking large strides forward.”

Ian Brinkley, director of socio-economic programmes at The Work Foundation, commented on the labour market statistics published today: “These figures are much better than expected given the apparent lack of growth in the economy. The strong growth in full-time jobs is especially encouraging, as this is one of the key indicators of a sustainable recovery.”

Although the figures are indication of a move towards recovery, the impact on actual unemployment figures is limited. This is because so many young people are moving into the labour market.