Contractors will already know that the recession is still very real as rates are under pressure with fewer contracts available, but the results of several surveys and research into the jobs market this month reveal that the economic decline is slowing down. However, not all is looking as positive on the contracting front, as HMRC vows to target offshore bank account holders suspected of tax evasion.
In this month’s ContractorCalculator Market Report:
- Monster Employment Index increases, showing a slowdown in UK job losses, but year on year it’s down by 37%
- UK firms can’t get enough engineers, according to Manpower survey, although only 5% of employers are hiring
- Positive outlook for construction contractors as the contraction of the Construction PMI slows, and the UK private sector increases activity for the first time in 13 months
- REC/KPMG Report on Jobs shows 60% of recruiters report stable or increased demand for temporary workers
- HMRC targets offshore account holders, with 60,000 set to be interviewed for suspected tax evasion.
Monster Employment Index
The Monster Employment Index has increased by 2%, the second monthly rise in the last quarter, indicating that the UK jobs market is beginning to stabilise. However, overall the index is down 37% year on year, clearly demonstrating that the labour market has a significant way to go before it achieves pre-recession levels.
Monster’s head of economic research, Hugo Sellert, commented: “Although demand for workers remains significantly lower than last year, signs of stabilisation are appearing across sectors of the economy.”
Education and healthcare workers accounted for the lion’s share of the growth, and the management and consulting sector rose by 13%, indicating that the market for interim executive contractors is growing.
Less positive news is that, despite increases in construction output this month, job demand in construction fell by 5%. Also, the indices for engineering, telecoms and IT all fell, although demand for managers and professionals rose by 2%.
Engineers and skilled tradespeople in short supply
Manpower’s Talent Shortage Survey has revealed that engineers top the league table of workers that employers are having difficulty recruiting, closely followed by workers in skilled trades. The survey reveals that 11% of employers are experiencing difficulties in recruiting, compared to 12% last year.
According to Manpower, skilled tradespeople include electricians, bricklayers, carpenters, masons and plumbers – workers who have typically served an apprenticeship and learned their skills over many years.
However, in its Employment Outlook Survey, Manpower has found that only 5% of UK employers plan to increase their headcount, whilst 11% are cutting positions and 81% are planning no change.
Construction Purchasing Managers’ Index fall slows
Although the construction sector continues to contract, there is some good news for contractors. According to the Construction Purchasing Managers’ Index (PMI), the rate at which activity is reducing slowed last month, and confidence amongst UK constructors has jumped significantly to a 21-month high.
Construction contractors who depend on the housing sector will be pleased to hear that the rate of contraction, previously at record levels, is easing due to the stabilisation of housing market conditions.
All the key indices for housing, commercial building and civil engineering, are still falling, but at significantly slower rates. And overall the index for total industry activity is showing the slowest decline since April 2008.
Data released in the regional PMI shows that activity in the UK’s private sector has risen for the first time in 13 months. Contractors in some regions will not feel the benefits, as most growth has been in London, the North West and the South West.
Report on Jobs
The KPMG/REC Report on Jobs shows that both vacancies and appointments continue to decline, but at a slower rate than over the last eight months. However, with more candidates available than positions, there has been a downward pressure on pay.
There is now some reason to hope that the UK jobs market has overcome the worst, at least for this phase of the recession
Mike Stevens, KPMG
According to REC chief executive Kevin Green, things are looking up: “This month’s Report on Jobs shows that vacancies and appointments continue to decline. However, there are some signs of recovery. For example, sixty per cent of recruiters reported either a stable or increased demand for temporary staff in May.”
These positive sentiments are echoed by KPMG partner, and Head of Business Services, Mike Stevens, who says: “There is now some reason to hope that the UK jobs market has overcome the worst, at least for this phase of the recession.
“For the third successive month we have seen a slowing in the rate of decline in both temporary and permanent staff appointments. Demand for staff is still falling, but much less fast than at the beginning of the year.”
Offshore bank account holders on HMRC radar
HMRC is planning a renewed campaign of targeting offshore bank account holders suspected of tax evasion. Of 100,000 offshore bank accounts suspected by HMRC of tax evasion, 40,000 have voluntarily contacted the Revenue, paying £450m in back taxes.
HMRC is targeting the remaining 60,000 and those that come forward will only face a 10% maximum penalty of unpaid tax, compared to the 100% HMRC says it will apply to account holders who continue to attempt to hide their funds offshore.
Contractors with undeclared savings offshore will almost certainly get caught by HMRC’s net, as banks were forced by HMRC to hand over their customers’ details last year.