The jobs market in the UK is facing a “slow, painful contraction”, with firms scaling back decisions on whether to recruit more staff against a background of global economic “turmoil”, a new report warned yesterday.
The Chartered Institute of Personnel and Development predicted that the employment situation will get worse for the rest of the year while medium-term prospects were no better.
Fewer firms were planning to offshore jobs abroad and recruit overseas workers, while the private sector will grow at a slower pace in the next three months, it was suggested.
Confidence in the public sector remains low for the next three months and will get worse next year, said the CIPD after surveying 1,000 employers.
Gerwyn Davies, public policy adviser at the CIPD, said: “The figures point to a slow, painful contraction in the jobs market.
“Many firms appear to be locked in wait-and-see mode, with some companies scaling back on all employment decisions against a backdrop of increasing uncertainty as a result of the eurozone crisis and wider global economic turmoil.
“The good news resulting from this lull in business activity is that fewer employers are looking to relocate abroad or make redundancies.
“The downside is that recruitment intentions are falling, which will make further rises in unemployment therefore seem in-evitable given that public sector job losses are outpacing the predictions made by the Office for Budget Responsibility.
“There is no immediate sign of UK labour market conditions improving in the short or medium term.”
The report was published ahead of new unemployment figures tomorrow which will show whe-ther the youth jobless total has gone over a million.
A Department for Work and Pensions spokesman said: “We always said the road to recovery would be tough – there is a long way to go until before we deal with all the economic challenges ah-ead, particularly given the crisis in the eurozone.
“There are jobs out there, with Jobcentre Plus taking on 10,000 vacancies every working day.”
Prime Minister David Cameron said: “Clearly what is happening in the eurozone is having a bad effect on the British economy and on other economies in Europe.
“The greatest stimulus though we can give to the British economy is to show the world that we have a plan for dealing with our debts and our deficit that keeps our interest rates low, and right now Britain has the lowest interest rates we have actually had since the Second World War.”