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DWF employment law experts examine latest labour market data

13 June 2023

DWF's employment law experts take a look at the latest labour market data for the UK, Scotland and Northern Ireland.

Large scale industrial unrest persists despite stable labour market 

UK wide data

The latest employment ONS figures for the period February 2023 to April 2023 show a robust labour market despite the ongoing economic challenges.  The highlights for the period show a UK employment rate of 76%, 0.2% higher than the previous quarter.  The UK unemployment rate for the same period was estimated at 3.8%, an increase of 0.1% from the previous quarter.  The UK economic inactivity rate was estimated at 21%, 0.4% lower than the previous quarter.  The ONS has reported that the number of people in employment increased to a record high in the latest quarter with increases in both the number of employees and self-employed workers.  

In March to May 2023 the estimated number of vacancies fell by 79,000 on the quarter to 1,051,000.  This is the 11th consecutive fall for vacancies and indicates a degree of uncertainty across industries as recruitment slows in response to economic pressures.  

For the period February to April 2023 regular pay saw its largest growth rate seen outside the pandemic with growth in regular pay (excluding bonuses) at 7.2%.  However, in real terms (when adjusted for inflation) growth in total and regular pay fell on the year in February and April 2023, by 2% for total pay and by 1.3% for regular pay.  With high levels of inflation and the cost of living crisis still biting we are likely to see some movement in the labour market as employees seek higher remuneration to meet their outgoings.  

Scotland data

Scotland's labour market shows continued resilience despite the difficult economic climate.  The headline figures for the period February to April 2023 show an estimated employment rate of 74.6%, a decrease of 1.8% over the quarter. By way of comparison, Scotland's estimated employment rate was slightly below the UK rate of 76%.  Scotland's unemployment rate was 3.1%, staying the same over the quarter.  Scotland's unemployment rate was below the UK rate of 3.8%.  In light of the difficult economic climate such negligible changes demonstrate a relatively robust labour market.  

As we look ahead to the warmer months we are likely to see some improvement in the employment rate, particularly in sectors such as hospitality and tourism.  However we may continue to see industrial unrest across Scotland as employers struggle to inflate wages in line with the cost of living increases.  Further, the labour market is likely to remain active as employees seek higher pay by moving employment.   

Northern Ireland data

The latest labour market figures for Northern Ireland over the period February to April 2023 show an improving picture with an increase in the employment rate over the period to 72.4%.  However this still sits below the overall UK employment rate of 76%.  The unemployment rate in Northern Ireland was 2.4%, this was unchanged over the quarter and lower than the overall UK unemployment rate of 3.8%.  Interestingly, the rate of unemployment is now at the same level as the pre-pandemic position.   There was a decrease over the quarter and the year in the economic inactivity rate to 25.8%, however, this still sits above the overall UK rate of 21%.

Employee jobs have seen an increase over the quarter of 0.6% and a large increase over the year of 2.9%, to the highest level on record, to 818,840 in March 2023.  In addition, the number of hours worked between February and April 2023 has increased by 3.8% over the year and is now higher than the period before the pandemic (November-January 2020).  

Despite the promising figures on increased employment levels, as we enter the summer months, there are still major issues affecting employees, which include the cost of living crisis, increased inflation levels and industrial unrest in some sectors. We can expect to see an active labour market as employees seek to increase their pay and benefits in order to deal with these challenges.

Further Reading