UK labour market data, May 2017 - PwC comments

May 17, 2017

In response to today’s UK labour market figures, Andrew Sentance, senior economic adviser at PwC, commented:

"Employment growth appears to be picking up again after a slowdown in the second half of last year. The numbers in employment were up by over 120,000 in the first quarter of this year - the biggest quarterly increase since the EU referendum. Construction and private services are the main sectors generating jobs in the UK. However, employment is flatlining in manufacturing and the public sector.

"The vacancy rate also points to a pick-up in the demand for labour. The number of unfilled vacancies has risen to its highest level since the current data series started in 2001.

"The figures on wage growth were more mixed. The annual rate of increase in total pay remains fairly steady at just under 2.5 percent. But pay increases have been quite dependent on bonuses in recent months. The rate of regular pay growth has eased back from 2.7 percent last autumn to 2.1 percent according to the latest figures. And whether we look at total pay or regular pay, neither measure of wage growth is keeping pace with inflation - which is now 2.7 percent.

"These latest figures therefore contain mixed news for future UK economic prospects. The pick-up in employment growth is encouraging. But the fact that wage growth is not keeping up with price inflation does not bode well for consumer spending - which has been a key factor contributing to UK economic growth in recent years."


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