UK’s private sector job creation outpaces public sector job losses

Job creation

Private sector employment in the UK has continued to increase, reaching a record high of 23.86 million in September 2012, official figures showed today.

The number of people employed in the private sector grew by 65,000 from June 2012, more than offsetting the decrease of 24,000 in the number of people working in the public sector, the Office for National Statistics reported. There were 5.75 million people employed in the public sector in September 2012.

The Department for Work and Pensions welcomed the figures and said that the private sector is consistently creating more jobs than are being lost in the public sector. Compared to a year ago an extra 627,000 people are working in the private sector, significantly outstripping the drop of 128,000 in public sector jobs.

Additional job losses are expected in the public sector as part of the government’s deficit reduction plan, and an effective growth strategy is needed to enable the private sector to absorb those people seeking jobs, commented David Kern, chief economist at the British Chambers of Commerce (BCC).

This requires further deregulation, increased infrastructure spending and the early creation of a state-backed business bank that improves access to finance, he added.

Overall, UK employment lifted by 40,000 to a record level of 29.60 million in the three months to October and the employment rate rose to 71.2%. The number of people in full-time employment increased by 44,000 while the number of people in part-time employment fell by 4,000.

There were 2.51 million people out of work in the three-month period, a decrease of 82,000, and the unemployment rate fell to 7.8% of the economically active population.

Brendan Barber, general secretary of the UK’s national trade union centre, the TUC, said that the fall in unemployment is good news but there is still a long way to go before the UK labour market returns to full health.

“We need a million more jobs to get back to where we were five years ago, and more action to help the quarter of a million young people who have been out of work for at least a year,” he said.

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