Boom in Seasonal Hiring May Offset Public Sector Job Losses in 4th Quarter

The latest quarterly Labour Market Outlook (LMO) survey report from the Chartered Institute of Personnel and Development (CIPD)/KPMG expects that job creation in the private sector, will be able to more than offset job cuts in public sector in the final quarter of 2010.

The autumn 2010 LMO survey of just over 450 HR professionals, finds a net positive balance between the proportion of employers intending to increase total staffing levels, as compared to those intending to lower them.  And this is the third quarter in a row to record a positive balance.

As in the spring and summer LMO surveys (and subsequently confirmed by official labour market statistics), increased demand for labour in the private sector is offsetting a fall in demand in the public sector.

However, employers as a whole appear to be far more cautious about employment prospects for 2011.

Commenting on the survey’s findings Dr John Philpott, the CIPD’s Chief Economic Adviser, said:

“Signs of not only sustained but also increasing buoyancy in private sector job prospects is encouraging, especially since some other forward looking economic and labour market indicators have been subdued of late. What remains to be seen is how much of this good news is merely a pre-festive season surge in private sector jobs or evidence of a sustained improvement that will continue to offset large scale public sector job cuts which, as the LMO survey shows, are already well underway and on a scale in line with the CIPD’s current forecast for total public sector job losses by 2015-16. With employers clearly far more cautious about the 12 month than the three month jobs outlook it is far too soon to conclude that the UK will avoid a rise in unemployment in 2011.”

Expected increases in employment levels this quarter are particularly strong in manufacturing and production and private sector services, particularly in the IT industry, consultancy services, and finance, insurance and real estate.

Falls in employment are expected in central government, local government, transport and communications (including media) and education. Falling demand in the public sector is due to a combination of reduced hiring and an increase in redundancies.

More than four in ten (41 per cent) of public sector organisations intend to make redundancies by the end of the year and these are expected to affect 14 per cent of their workforces.

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