UK Disappointing

UK employment Outlook least positive in Europe

The UK jobs Outlook has rebounded six points in the last six months to -6%, according to the latest ManpowerGroup Employment Outlook Survey, but the picture is disappointing compared to the rest of Europe and the labour market is increasingly divided. Sharp improvements in finance and business services and construction are offset by new falls in retail and hospitality, while the outlook in London has hit an all-time low.

The ManpowerGroup Employment Outlook Survey is based on responses from 1,306 UK employers. It asks whether employers intend to hire additional workers or reduce the size of their workforce in the coming quarter. It is the most comprehensive, forward-looking employment survey of its kind and is used as a key economic indicator by both the Bank of England and the UK Government.

Mark Cahill, Managing Director, ManpowerGroup UK says: “The headline numbers are steadily moving in the right direction, and we are seeing a continued resurgence in key sectors like finance and business giving us reasons to be cheerful as we head into 2021. However, despite this positive trajectory, the UK remains the least optimistic in Europe, with continued uncertainty over Brexit and the effects of a second COVID-19 wave still looming large. Looking further ahead, our data also shows that only 49% of employers expect their hiring to return to pre-pandemic levels within the next 12 months.”

Retail and hospitality is down two points to -13%, the weakest on record. Cahill continues: “The further decline of Britain’s high streets is deeply concerning. Shops, restaurants, and bars have remained mostly shut across the country, and the young people who make up a large proportion of workers in this sector have often borne the brunt. Stalwarts like Pret a Manger and TM Lewin are closing their doors as demand for quick lunches, smart shirts and suits has dried up, while Caffe Nero is on the brink of insolvency.”

Nowhere is this more evident than in London which has also seen a double dip: the capital’s Outlook fell to -12% in Q3, then rose marginally to -11% in Q4, before dropping back to -15%, an all-time low. Cahill adds: “London’s shuttered shops are a stark reminder of the economic impact of the pandemic. Many of the city’s largest companies stuck to their hiring plans at the start of the first lockdown but are now adopting a ‘wait and see’ approach, deferring hiring until the impact of the EU-Exit and the COVID-19 in the new year is clearer. There is also a broader move away from the London-centric economy, with more flexible working policies providing a larger pool of candidates from anywhere in the UK.”


The lack lustre picture in London comes despite a nine-point surge in optimism among finance and business services. At +2%, it has returned to positive territory for the first time since the pandemic started. Cahill again: “Despite a tough year, many financial services firms have been able to adapt quickly to remote working, and this is most evident from the sector’s medium sized businesses. There is also strong demand for business admin, HR, and management roles as more businesses prepare for long-term remote work and for the EU-Exit.”

Construction is also much improved on -1%, from -7% last quarter, driven by pent up demand from the first lockdown. Cahill adds: “The increase in Outlook for the sector, along with a boom in the housing market, points to a potential gap, which may be further accentuated by Brexit. Migrant workers have been especially hard hit by the fallout from COVID-19, and nearly half a million have left the UK since March. The question will be how do we manage skills shortages through 2021, particularly in high-demand, skill-specific sectors like construction and healthcare? While some areas of the economy are going to be hit worse than others, employers need to take responsibility to bridge workers and help them upskill and reskill to prepare them for the future.”

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