Peter Hemington, Partner at BDO LLP, said, “The UK labour market continues to be the great mystery of the UK economy. As the data this morning highlights, we’re seeing a slow, but continued increase in employment, despite consistently sluggish GDP growth figures. As a consequence of this disconnect, there is scepticism as to the true strength of the labour market, especially given that many of the Private Sector jobs driving employment growth are part-time or on reduced wages.”
Figures from Monday’s BDO Business Trends report reflect businesses’ scepticism towards the Labour Market’s health. The Report’s Employment Index, which measures confidence in the Labour Market one quarter ahead, fell for the fourth consecutive month to 93.2, further away from the 95.0 mark that indicates growth.
Peter Hemington continued: “Our figures, alongside fears that slackening demand will force employers to make redundancies, indicate that the Labour Market may begin to suffer towards the end of the year.
“With these concerns in mind, the dynamism and pragmatism of the UK’s private sector in creating flexible employment should be applauded. However a skilled and sizeable labour force can only be fully exploited if there is sufficient demand for UK goods and services. We urge UK businesses therefore to be as innovative as possible in finding alternative trade targets, moving away from the volatile eurozone to the BRIC, CIVET and Next 11 economies.”
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