Unemployment set to fall between now and next election

This quarter, businesses report increasing their number of employees by 1.6 per cent over the past 12 months. In addition, this is projected to rise to 2.2 per cent growth over the coming 12 months, an increase that could provide jobs for a further 450,000 private sector employees. 

Particularly fast employment growth is expected to come from the construction industry at 3.5 per cent for the next 12 months, closely followed by IT & Communications and Business Services, at 3.4 per cent and 3.2 per cent respectively.

However, in Q2 2014, 19 per cent of companies reported that staff turnover is a greater challenge than a year ago, up from 14 per cent in Q2 2013. In addition to staff turnover, the availability of workers with the appropriate skills is also becoming a challenge for more businesses. 

Some 15 per cent of companies report that finding the right management skills is a greater challenge than a year ago, and 16 per cent report the same for non-management skills. These shares have been generally climbing.

Overall, the latest BCM suggests that unemployment will fall sharply between now and the next general election. It is suggested that skills shortages could become a constraint on growth, as employers can’t find the workers they need for roles. 

In addition, businesses expect growth to come largely from domestic sales rather than exports, which could lead to some pretty grim trade deficit figures over the coming months as the UK imports far more than it exports.

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By Shané Schutte

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