Sunday, 9 November 2008
Finance and property slump claims 300,000 jobs
BRITISH business has shed more than 300,000 jobs over the past three months, research shows, far outnumbering the number of new jobs firms have created. Net job losses since August exceed 235,000.
The research comes ahead of official figures this week expected to show another sharp rise in unemployment based on reports from individual companies.
These firms reported 104,386 job losses, compared with 32,977 gains, a net loss of 71,409 jobs. From the beginning of August to the end of October there were 309,721 job losses and 73,971 gains.
“Many of the job losses have been in two sectors, financial services and property and construction,” said Ray Murphy of Alert Research, which produced the figures from a database of 100,000 companies it monitors. “The rippling out to the wider economy has a long way to go.
“Job losses outnumbered gains by four to one over the quarter to the end of October with no evidence this trend will reverse in the near future.”
Fears of a big increase in unemployment have grown as the economy has weakened significantly over the past few weeks. The research shows that job losses accelerated significantly from the beginning of September.
It comes ahead of further gloomy evidence to be published this week on the job market. The Chartered Institute of Personnel and Development’s Labour Market Outlook, published with KPMG, is set to warn that public and private-sector organisations have scaled back their recruitment intentions sharply.
The CBI is also set to say that smaller firms, squeezed by the credit crunch, are being forced to cut back on staff. Many small businesses only shed workers reluctantly because of the cost of recruiting and training staff later.
Analysts are looking for a sharp rise in unemployment when official figures are released on Wednesday. Michael Saunders, an economist with Citigroup, expects the claimant count to have risen by 50,000 last month, against September’s increase of 31,000.
“Household fears of unemployment are extremely high,” he said. “We expect these readings to be reflected in another very large monthly rise.”
The claimant count now stands at 939,900, and is likely to rise above the symbolic 1m level before the end of the year. The government’s wider measure of unemployment, based on the Labour Force Survey, is 1.79m and set to rise above 2m.
“Contracting economic activity and depressed business confidence are exacting an increasing toll on the labour market,” said Howard Archer, chief UK economist at IHT Global Insight.
Figures on Friday showed that America’s non-farm employment fell by 240,000 last month, pushing the unemployment rate up to a 14-year high of 6.5%.
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