UK wide data
The latest employment ONS figures for the period between October and December 2022 remain relatively steady despite the current economic climate. The highlights for the period show a UK employment rate of 75.6%, 0.2% higher than the previous quarter. The UK unemployment rate was estimated at 3.7%, 0.1% higher than the previous quarter. The UK economic inactivity rate was estimated at 21.4%, 0.3% lower than the previous three month period. The stats suggest the decrease in economic activity is driven by young people aged between 16 and 24 although the Government has called for more retirees to return to the workplace. Despite the unemployment rate creeping up marginally from the previous figures, the overall market appears stable.
Following zero growth in the economy between October and December, recent ONS figures have shown that the UK narrowly avoided falling into a recession in 2022. The ONS has reported that there was a sharp 0.5% fall in economic output during December, in part due to the widespread strike action which has led to the highest number of working days lost since November 2011.
Commenting on the UK data, Joanne Frew, Global Head of Employment and Pensions at DWF, said: "With the economic challenges continuing into 2023 we undoubtedly will see some job losses across the market as employers grapple with soaring costs. Many organisations are considering restructuring in order to put themselves in the best possible position to ride out the difficult economic climate."
Scotland data
The latest labour market figures for Scotland remain stable despite ongoing challenges. The headline figures for the period between October and December 2022 show an estimated employment rate of 76.6%, an increase of 1.3% over the quarter. By way of comparison, Scotland's estimated employment rate was above the UK rate of 75.6%. Scotland's unemployment rate was 3.3%, 0.2% lower than the previous quarter. Scotland's unemployment rate was below the UK rate of 3.7%. The latest figures yet again show an underlying resilience in the labour market in Scotland.
The economic turmoil looks set to continue for some time with the ONS reporting that the UK narrowly avoided falling into a recession at the end of 2022 following a period of zero growth between October and December. The UK witnessed a 0.5% fall in economic output during December, in part due to strike action. With economic difficulties ongoing many expect there will be some job cuts across the market in Scotland as employers battle with soaring costs in coming months.
Commenting on the Scottish figures, Ann Frances Cooney, partner leading the Scottish employment law practice at DWF, said: "Despite the looming recession the labour market is still highly competitive as employees are seeking out more lucrative employment to counteract the cost of living crisis. Against the backdrop of an unsettled economic climate, employers should focus on retaining core talent to help weather the storm."
Northern Ireland Data
The latest labour market figures for Northern Ireland remain steady, despite the ongoing economic challenges. There were increases in the employment rate over both the quarter and the year to October to December 2022 to 71.9%. The unemployment rate in NI decreased over the quarter and the year to 2.5% which is below the UK unemployment rate of 3.7%. The economic inactivity rate in NI decreased over the quarter and the year to 26.3%, however, this was still higher than the UK average, estimated at 21.4%.
Responding to the figures, Rachel Richardson, Director in the Employment team in the Belfast office of DWF commented "Following a period of no growth between October and December 2022, a recent ONS report stated that the UK managed to avoid falling into recession in 2022. According to the ONS, there was a 0.5% fall in economic output in December 2022, partly due to the widespread strike action which took place across the UK.
As we expect to see the economic challenges continue well into 2023, we may see restructuring and increasing redundancies in Northern Ireland, as employers struggle with the soaring costs which are seriously impacting their businesses. However, in addition and in view of the buoyant labour market and cost of living crisis, employers will need to think about ways of retaining staff and attracting new talent into their organisations".
