Construction employment holds up in 2011 - but fears remain over job prospects

Posted by Brian Green

14 March 2012

From Brickonomics

The latest national jobs figures may well provide some comfort for those in construction as they show that the level of employment held up last year.

The number of jobs stood at 2,052,000 on the workforce jobs by industry count. And employment on the Labour Force Survey count stood at 2,165,000.

Given the margins of error in the surveys, the broad picture, as we see from graph 1, is of a flat jobs market in construction for the best part of two years.

After a scary drop, which ripped out hundreds of thousands of jobs, there appears at first sight to be stability.

But the figures, as most aggregated figures do, mask other realities.

Firstly they mask the disparity in fortunes across and between regions.

If we look at how far jobs have fallen from their peak levels in each region we see that London and the South East have come off not too badly. Job numbers are down about 4% in London and 10% in the South East from peak.

But in the North of England the picture is grim. There’s been a 30% cull of jobs in the North East, and 25% of jobs have been lost in the North West and Yorks & Humber.

Meanwhile Northern Ireland is sharing a similar amount of pain.

The pattern shown in the graph 2 fits the general pattern of the economy and probably comes as little surprise.

But if we look at graph 3, which indexes the jobs to 2007 Q3, the comparison of London and the South East with the three northern English regions over the recession is interesting. A recovery in jobs in London and the South East began a year ago, but there’s been no similar recovery in jobs in the North.

Look closer at the data and we see that in London the level of construction jobs may not be at peak, but it’s back above the level in the autumn of 2007.

We should expect this disparity in job prospects to continue as the North is far more reliant on the public sector.

The ONS figures for construction jobs are also historic and mask the changes afoot.

The employment firm Manpower this week release what was generally a pretty upbeat report on job prospects for the coming three months for the UK as a whole.

However, it showed in the sector breakdown that construction was taking a turn for the worse. It stood out as the sector with the worst prospects and those prospects had worsened over the latest quarter. The Markit/CIPS construction survey, despite its pretty optimistic view of the industry as a whole, also points to worsening jobs prospects.

So while we can be thankful that jobs held up last year, the industry needs to do much more if it is to protect itself from further erosion in the skills base.

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