Cautious hiring in UK service sector despite long-term growth continuing
3 October 2012
UK services companies adopted a cautious attitude to recruitment in September, with net employment falling for the first time in 10 months, despite the sector registering its 21st consecutive month of growth.
Wed, 3 Oct 2012
UK services companies adopted a cautious attitude to recruitment in September, with net employment falling for the first time in 10 months, despite the sector registering its 21st consecutive month of growth.
After accounting for seasonal factors, the Business Activity Index in the Markit/Chartered Institute of Purchasing & Supply (CIPS) PMI recorded 52.2 in September, down from August’s 53.7 mark but still clearly above the 50-point mark indicating growth.While employment was down, the rate of jobs decline was less severe than that seen at the end of last year. Employment in services declined overall in most months in 2011, and indeed before the recent 10-month growth period, had been consistently falling with only a few exceptions since the start of 2008.
Growth rates remained below trend, the report found, with companies generally able to keep on top of workloads with fewer staff, although there was a solid increase in volumes of incoming new business following an Olympics-related lull.
Chris Williamson, chief economist at survey compilers Markit, says: “With the mini-boom in the labour market having now come to an end, it seems inevitable that unemployment will start to rise again.
“Hopes are therefore pinned on the recent upturn in new orders being sufficiently strong and sustained to bring about improved growth of business activity and renewed hiring in coming months.”
UK services companies adopted a cautious attitude to recruitment in September, with net employment falling for the first time in 10 months, despite the sector registering its 21st consecutive month of growth.
After accounting for seasonal factors, the Business Activity Index in the Markit/Chartered Institute of Purchasing & Supply (CIPS) PMI recorded 52.2 in September, down from August’s 53.7 mark but still clearly above the 50-point mark indicating growth.While employment was down, the rate of jobs decline was less severe than that seen at the end of last year. Employment in services declined overall in most months in 2011, and indeed before the recent 10-month growth period, had been consistently falling with only a few exceptions since the start of 2008.
Growth rates remained below trend, the report found, with companies generally able to keep on top of workloads with fewer staff, although there was a solid increase in volumes of incoming new business following an Olympics-related lull.
Chris Williamson, chief economist at survey compilers Markit, says: “With the mini-boom in the labour market having now come to an end, it seems inevitable that unemployment will start to rise again.
“Hopes are therefore pinned on the recent upturn in new orders being sufficiently strong and sustained to bring about improved growth of business activity and renewed hiring in coming months.”
