From the TUC

UK still five years off pre-recession jobs level

15 Jun 2011, by in Labour market, Uncategorized

While there have been improvements in recent employment figures, the state of the labour market is still extremely fragile and the UK is still a long way off returning to its pre-recession health. Analysis by the TUC shows that it could take over five years for the UK to return to its pre-recession employment rate, and far longer in the north of England.

The analysis compares employment rates for working age adults (16- to 64-year-olds) across the UK in February 2008 – around the beginning of the recession – with each year up to February 2011, the most recently available figures. The analysis then uses the rate of jobs growth over the last 12 months to estimate how long it will take each region to return to its pre-recession level of employment.

The analysis finds that at the current rate of progress, it will take around five and a half years for the UK to return to its pre-recession level of 73 per cent, with the UK employment rate increasing by 0.5 percentage points over the last year. However, there are huge disparities across the country.

While London is set to return to its pre-recession employment rate of 70.3 per cent within two and a half years, it could take the South East decades to return to its pre-recession level of 77.2 per cent.

Of even greater concern is that employment rates in the north of England have actually fallen over the last 12 months, suggesting it will take a very long time for their labour markets to fully recover.

The gap in employment rates between the best and worst performing UK regions has widened to nearly ten per cent over the last year – 75.1 per cent of working age adults are in work in the South East compared to 65.5 per cent in the North East – and looks set to grow in future years.

The TUC analysis is in line with forecasts by the Office for Budget Responsibility, who forecast the employment rate for all workers aged 16 and over to be 58.5 per cent in early 2016 – nearly 1.8 percentage points lower than the employment rate (for adults aged 16 and over) at the start of 2008 (60.3 per cent).

Summary of our analysis

Region Employment rate, Feb 2008 Employment rate, Feb 2010 Employment rate, Feb 2011 Years to return to pre-recession employment rate
North East 68.4 66.7 65.5 n/a
North West 70.2 68.9 68.9 n/a
Yorkshire & Humber 72.1 68.8 68.8 n/a
East Midlands 74.1 70.9 71.8 3.6
West Midlands 71.5 68.8 67.9 n/a
East of England 75.5 73.3 74.5 1.8
London 70.3 67.8 68.8 2.5
South East 77.6 75 75.1 26
South West 76.7 73.1 73.4 12
Wales 69.5 66.6 68.5 1.5
Scotland 74.3 70 71.2 3.6
UK 73 70.2 70.7 5.6

Source: Office for National Statistics

To download our full analysis as an Excel work

One Response to UK still five years off pre-recession jobs level

  1. Business Droid
    Jul 12th 2011, 4:18 pm

    Is there any particular reason why the South East would take so long compared to other regions of the country to return to pre recession figures of employment? I know there isn’t as much industry this side of the country, but surely the more affluent companies are down this side of the country.