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Job market picking up in the private sector

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The next few months will see a significant increase in redundancies, a new report has forecast, but the private sector will still continue to create jobs.

The latest quarterly labour market outlook study from the Chartered Institute of Personnel and Development (CIPD) has indicated that plans among employers to let staff go are at their highest since 2004.

Many of the job losses will occur in the public sector, with two thirds of public organisations looking to reduce the size of their workforces in the first quarter of 2011.

The net employment index – which measures the difference between the proportion of employers intending to increase and decrease total staffing levels – has fallen to -3, down from +11 in the previous three months.

There was, however, better news in the private sector. Here the manufacturing sector registered +20 as did the services sector.

Gerwyn Davies, public policy adviser at the CIPD, said: “The first quarter of 2011 was always going to be a quarter of reckoning for the jobs market, and it seems that last year’s modest recovery will be reversed by a modest relapse this year. Encouragingly, the private sector continues to generate new jobs, but we are some way off the jobs boom that we are all hoping for.

“While private sector jobs generation is encouraging, it’s more important than ever that the Government continues its growth efforts in the private sector so as to offset the jobs gloom in the public sector.”