Job vacancies at five-year low as smaller firms scale back recruitment
Small firms cite labour and operating costs as reasons for scaling back hiring, the UK's statistics body says.
The latest government data reveals that job openings have reached their lowest point in over five years, primarily due to smaller companies reducing their hiring efforts.
Between May and July, the number of available positions slightly decreased to 707,000, as reported by the Office for National Statistics (ONS). The ONS indicated that small businesses are attributing this reduction in recruitment to rising labor and operational expenses.
Overall, the ONS characterized the labor market as "little changed," with the unemployment rate holding steady at 4.9%.
Regular earnings, excluding bonuses, saw a modest increase, growing at an annual rate of 3.5% in the three months leading up to June.
Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales, commented, "The UK labour market remains stuck in a low-churn limbo, with employers reluctant to hire, fire or offer bigger pay rises as they grapple with rising costs, intensifying global headwinds and heightened policy uncertainty." He added, "The persistent slide in vacancies is a red flag for the jobs market, suggesting labour demand is shrinking amid soaring employment and energy costs, while greater automation is also squeezing some entry-level roles."
Yael Selfin, chief economist at KPMG, observed that while there was an uptick in pay growth, this was "driven by a rise in public sector wages." She noted that private sector pay growth, which she believes offers a more accurate reflection of underlying labor market conditions, decelerated to 2.8%.
Despite growth in the UK economy, experts are cautioning about difficult months ahead.