Manufacturing sector set to strengthen in second quarter

Employment figures throughout UK manufacturing, and in particular the automotive industry, are set to improve substantially for the second quarter of 2002, indicating continuing robust growth across the sector, and improving prospects for IT project release. Recruitment and outsourcing company Manpower, in its latest quarterly survey of employment prospects, finds an increase in the net balance of auto and manufacturing employers planning to take on more staff in the period April-June 2002 of eight percentage points compared with the last quarter. It is a significant turnaround, and from a reliable source. Manpower’s surveys have been accurately predicting employment prospects for decades and are regarded as one of the key barometers used by Government and the Bank of England’s Monetary Policy Committee as evidence of labour market activity. In fact, its survey also finds every industry sector, with the exception of electronics, set to increase staffing in the quarter ahead. Small companies, which it defines as those employing between 10 and 49, are the most optimistic about, with 19% predicting new jobs. The UK survey results show a similar trend to Manpower’s US Employment Outlook Survey, which predicts that hiring activity will improve slightly in the second quarter of 2002, the first upward trend in a year. The findings also suggest that skill shortage is again becoming a growing concern – especially in manufacturing, which is top of its skill shortages sector league table. Manpower managing director Iain Herbertson says: “Business seems to have bounced back from last quarter’s downturn, when the impact of the US recession and September 11th hit employment prospects hard. We believe there is reason to be cautiously optimistic – prospects have returned to the levels they were at in the first half of 2001.” For a full recovery, we need to see this optimism being maintained. Next quarter’s figures will provide an early measure of just how sustained this period of improvement is likely to be. Manpower, unsurprisingly, advises flexible staffing till then, so that it can be flexed up or down as conditions change. Manpower’s quarterly survey is in its 35th year. The survey asked over 2,000 UK companies, spanning 11 regions and 20 industry sectors, if they expect an increase, decrease or no change in their staffing levels in the three months to the end of June 2002. A ‘net balance’ is calculated by subtracting the percentage of companies expecting to reduce staff numbers from the percentage expecting to take on staff.