Manufacturing job count falls to another new low

The latest data from the Office for National Statistics showed there were 2.87 million employee jobs in manufacturing industries in the three months to July 2008, down 42,000 on the same period a year earlier and 5000 down on last month’s figure. Across the wider economy there was, as widely predicted, a fall in both the number of people in employment and the employment rate. The number of vacancies also fell. In the latest reference period the working age employment rate was 74.7 per cent, down 0.2 percentage points from the previous quarter. The number of people in employment decreased by 16,000 over the quarter. The unemployment rate was 5.5 per cent, up 0.2 percentage points from the previous quarter, equating to 81,000 more unemployed people. The number of people claiming unemployment benefit was 904,900, up 32,500 from the previous month. The number of vacancies was 613,200, down 56,900 from the previous quarter. A bleak analysis of the figures from Ian Brinkley, associate director at The Work Foundation, suggested that the unemployment might reach 2.5 million by the end of 2009. “These are very bad figures,” he said. “The ILO unemployment rate has jumped by 164,000 over the quarter to August 2008. Employment has fallen by 122,000. They remove any doubt about the seriousness of the impact on the ‘real economy’ of the unravelling of the financial system. “There are two measures of unemployment. The claimant count measures the number of people able to claim unemployment benefit. This stands at 940,000 and will reach 1 million shortly, probably next month – symbolically important but economically irrelevant. The better measure is the ILO unemployment rate which includes all those actively looking for work and able to start a job in 2 weeks time, regardless of whether they claim unemployment benefit or not. This currently stands at nearly 1.8 million. It will be 2 million by the end of the year, although the lag in statistics means we will not confirm this until February. Where it goes from there is anyone’s guess, but it could easily reach 2.5 million by the end of 2009. “We can say very little about what industries are being hit and where because – frustratingly – the statistics for jobs by industry only go up to June. We will have to wait until December before we see what the full impact has been, but the prime candidates have to be construction, finance and (possibly) distribution. “What we can say is (a) employers are not so far making more use of temporary labour (b) the fall in jobs is largely among men working full time (c) the fall in jobs is disproportionately concentrated among the young (under 25); “Regional data from the Labour force Survey (the source of the ILO measures of unemployment and employment) has big error margins and is unreliable comparing quarter on quarter. The biggest falls have been in London, the North West, West Midlands, and Scotland. Regions less affected so far are South East, Yorkshire and Humberside and North East.”