Every quarter, the Office for National Statistics (ONS) releases a labour market overview with estimates of employment, unemployment and other employment-related statistics for the UK.
We have looked at the top highlights from the Q1 2023 report to get some sense of the labour market direction for 2023.
Employment Rate Highlights
In the November 2022 to January 2023 period, the UK employment rate was estimated at 75.7%. This is an increase of 0.1% compared to the three months earlier. This small increase was driven by part-time employees and self-employed workers.
The unemployment rate for this time period was largely unchanged at 3.7%. However, the overall number of people unemployed over the 12 month period has increased slightly.
Employment Rate (all aged 16-64)
Quarterly changes: 0.1%
Employment Rate (all aged 16-64)
Quarterly changes: 0%
Employment and Jobs
December 2022
Vacancies and Unemployment
All vacancies: 1,133,000 which was -76,000 change for the quarter (-6.3%)
Unemployment: 1,253,000 which was +5,000 change for the quarter (0.4%)
Overall the number of unemployed people per vacancy was 1.1%
Vacancies in Construction
The construction industry had a total of 41,000 vacancies for the quarter which was a change of -6,000 or -13.1%.
Pay Statistical Highlights
In real terms (adjusted for inflation), growth in total pay fell by 3.2% and regular pay fell by 2.4%.
Nominal Earnings (average weekly earnings annual growth rates)
In real terms (adjusted for inflation), growth in total pay fell by 3.2% and regular pay fell by 2.4%.
Real Earnings (average weekly earnings annual growth rates - real pay)
Inflation has been increasing, causing real pay growth rates to decrease.
Earnings: average weekly earnings (nominal) - total pay
Overall average v construction industry average January 2023
January 2023
*Changes in the average seasonally adjusted values for the three months ending with the relevant month compared with the same period a year earlier
Indigo Comment
With unemployment at an all time low and economic inactivity still very high, businesses have plenty of challenges ahead of them in 2023.
The stats tell us that labour and skills shortages, coupled with continued wage pressure could be a significant barrier to economic growth for the UK economy as a whole. Even though the Government announced a few actions in the March Spring Budget, there are unlikely to be too many quick wins.
There needs to be much more collaboration between business and policy makers to tackle these problems – let’s hope that we see some of that through in the next few months to avoid the UK going backwards.
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