News that Britain’s unemployment rate has fallen to 4.8%, its lowest level since September 2005, suggests that the economy is not suffering from any post-Brexit blues. The news delighted employment minister Damian Hinds who hailed “the resilience of the UK labour market”.
With wage growth also holding up well, contractors should find that their skills are still very much sought after and that rates should not be adversely affected. So, which sectors are enjoying the fastest rates of jobs growth? We digest all the latest economic analysis and what it means for the employment prospects of UK contractors.
The Office for National Statistics’ (ONS) employment report for the period July to September 2016 revealed that unemployment fell by 37,000 in the previous quarter, bringing the total to 1.6 million. The number of self-employed, which includes contractors, also rose to 4.79 million, an increase of 213,000 for the year, equating to 15.1% of the total UK workforce.
With the upcoming Autumn Statement (23 November) expected to be “unashamedly pro-business” and provide an injection of billions of pounds in much-needed infrastructure investment, particularly targeting roads and rail, contractors with specialist engineering and design backgrounds alongside the research and development sector are expected to be the big beneficiaries of the government’s plans.
The Recruitment & Employment Confederation’s (REC) latest jobs report also indicated that there were stronger increases in demand for temp workers and contractors who are enjoying better wage growth than those in permanent employment. Engineering, finance and IT – traditional hotbeds for contractors – were singled out as three of the most specialist skills dependent sectors, as organisations continue to grapple with talent shortages.
Foreign firms are also keen to grab a slice of the action and are growing their teams in the UK as they prepare to bid for the big infrastructure projects. US engineering giant Louis Berger will set up its international operations in London as it seeks to bolster its presence in the lucrative UK market. The company already employs a significant number of British nationals but is looking to hire more UK-based engineering contractors to cope with demand.
Housing is another sector that remains buoyant. With the urgent need for more homes to be built across the UK, builders will be redoubling their efforts to find the contractors they need to get their many projects off the ground. To help alleviate the housing crisis, the government is expected to provide added investment to the Home Building Fund that will provide a much-needed cashflow boost to small and medium sized developers.
The economic picture is certainly not as bleak as many venerable institutions such as the Bank of England and the International Monetary Fund (IMF) would have us believe. However, taking the unemployment figures at face value is clearly a risky short-term view and with the spectre of inflation looming, workers will be hit by a fall in their spending power. However, the government’s fiscal stimulus, the uncertainty surrounding Brexit and the ongoing acute skills shortages means that projects for contractors aren’t likely to dry up any time soon.