Chamber Network reacts to May 2021 UK labour market figures 

The latest figures suggest that the jobs market has been broadly stable in recent months, with some early signs of recovery.

The number of payroll employees has increased for the fifth consecutive month but remains 772,000 below pre-coronavirus (COVID-19) pandemic levels. Since February 2020, the largest falls in payrolled employment have been in the hospitality sector, among those aged under 25 years, and those living in London.

Following a period of employment growth and low unemployment, since the start of the pandemic, employment has generally been decreasing and unemployment increasing. However, the latest estimates for January to March 2021 show signs of recovery, with a quarterly increase in the employment rate. Meanwhile, there was a quarterly decrease in the unemployment rate and the economic inactivity rate increased on the quarter. With the reintroduction of many coronavirus restrictions, total hours worked decreased on the quarter.

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“UK unemployment remains on track to peak at a much lower level than in recent recessions. However, the squeeze on business cash flow from any marked delay to the planned full reopening of the economy may trigger renewed job losses, particularly when furlough becomes less generous over the summer.

“The economic scarring caused by coronavirus may drive a two-track jobs market recovery, with strong demand for labour in sectors where activity rebounds quickly, but with young people now entering the workforce and those whose lost their job during the pandemic at particular risk of longer-term unemployment.”

“More interventions are likely to be needed to support the UK jobs market, including extending the kickstart scheme help protect young people from the risk of displacement from labour market.”