Unemployment falls to lowest level since 2009

Christian Spence, Research Manager at Greater Manchester Chamber of Commerce

Commenting on the latest labour market figures, Christian Spence, Head of Business Intelligence at Greater Manchester Chamber of Commerce, said: “Nationally unemployment fell again in the first three months of 2014 to 6.8% of the population, the lowest level since early 2009. The claimant count, too, fell by over 25,000 to 1.117 million, a level not seen since November 2008.

“In Greater Manchester, the news is similarly positive. The GM claimant count fell by over 2,700 to just under 58,700 with the Greater Manchester Chamber of Commerce seasonally adjusted claimant count falling by around 2,500 to under 58,000, a number which excludes any seasonal effects. The strong performance is seen in all 10 of the Greater Manchester local authorities with the same results for youth unemployment - a fall in all boroughs and across GM as a whole. Total pay increases for the three months to March 2014 is shown to be 1.7%, above the latest CPI inflation for March of 1.6% and broadly level with the three-month average for the same period, further reducing pressure on real household incomes.

“The labour market overall continues to perform well with unemployment falling at a quicker rate than many expected and employment rising at the fastest rate on record. The increasing in pay rates is expected to accelerate as the year continues and, as the Chamber predicted last year, we expect the April pay round particularly to show stronger and above inflation rises. The tightening of the labour market, as unemployment continues to fall, will cause pressures for many employers seeking skilled and experienced talent for their workforces as they continue to recruit to manage the further increases in demand as growth continues at its current pre-recession rate. This is likely to continue to feed pressures into increased salaries in pay negotiations as the year progresses. Sectors such as manufacturing, construction and the important retail, leisure and accommodation industries have been seeing above-inflation pay rises for some time and, with the exception of the public sector, we expect these levels of growth to move into other sectors over the coming quarters.

“The outlook is positive but there are areas where work must continue, particularly in supporting young people and those furthest from the labour market into work so that as large a portion of the labour force can benefit from the strong economic recovery.”