IoD: Labour market performs well despite mounting challenges

Responding to today’s official labour market figures, showing that there are 32.07 million people in work, 125,000 more than for January to March 2017 and 338,000 more than for a year earlier, Seamus Nevin, Head of Employment and Skills Policy at the Institute of Directors, said:

“The figures today show that the UK labour market is performing well despite mounting challenges. Once again, we have reached a record employment rate now at 75.1%, with female employment also at a record high of 70.5%. Unemployment and inactivity rates are at their lowest since comparable records began.

“Full-time employment is also on the increase with the number of people on Zero-Hours Contracts (ZHC) now 20,000 fewer than a year ago. Although the vast majority of people on ZHCs are happy with their employment terms, employers still need to engage with their staff to ensure they are being given the option to move to a guaranteed hours contract if they so choose.

“However, one concern is that household incomes continue to be squeezed with a 0.5% fall in real terms pay. Nominal wages are up 2.1% but with the weakness in sterling, higher input costs are filtering through to consumer prices for clothing, food, energy and other household goods. Businesses will feel worried if consumer demands starts to falter as a result of subdued real wage growth.”

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