More tough times despite Q4 growth

11-November-2009 | By Colin Cottell

The recession will end in the current quarter of this year, however, recruiters will continue to face tough times for some time to come, recruiters have heard.

Speaking at the release of the Recruitment and Employment Confederation’s ‘Turnover & Key Volumes Report’ in London, Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said the economy would grow in the final quarter of the year, although growth would be weak.

Williams said he expected UK growth of 0.7% in 2010. This is lower than the US (2.6%) and Germany (1%).

He warned that because of the length and depth of the recession it would be 2012-13 until the economy got back to the level of output before the recession.

“Recessions associated with the finance sector (such as this one) are much longer and deeper than those not associated with the finance sector because people can’t borrow,” he explained.

And he added that there was “a lot of uncertainty” over the first quarter of 2010, when the VAT rate goes back up to 17.5%. This could have an adverse effect because people would make purchases in advance of the increase, he said.

Williams predicted that employment levels won’t improve until 18-24 months after the recession ends.

According to the REC Research Unit, unemployment will hit 3m in early 2010, although the number of redundancies will decrease.