The number of new job advertisements fell for the second straight month in November, another sign that demand for workers is weakening as companies grapple with budget uncertainties and proposed changes to labor laws.
According to the latest Recruitment and Employment Confederation (REC) survey, new job postings fell 14.4 percent between October and November, while the total number of active job advertisements fell 11.2 percent over the same period.
The slowdown is notable given that industries such as retail and hospitality typically see an acceleration in hiring in the run-up to Christmas. The REC said the decline suggests many employers have chosen to pause recruitment ahead of the Chancellor’s Budget publication on November 26, while waiting for clarity on the government’s employment law.
Although the bill was weakened towards the end of the month, it remains stalled in the House of Lords, where colleagues have called for a cap on compensation payments in unfair dismissal cases, raising concerns among many employers.
REC chief executive Neil Carberry said that while the budget had unsettled businesses, the end result was less damaging than many had feared.
“While the budget was by no means easy for businesses to rethink, the overall picture for most sectors was more favorable than feared,” he said. “We can hope that this, together with the more pragmatic tone adopted by the Government on the Employment Rights Bill last month, will help to get the recruitment market moving again.”
The decline in vacancies is the latest sign that budget speculation has weighed on economic confidence. Official figures released last month showed the economy unexpectedly contracted 0.1 percent in October. The Office for National Statistics found that uncertainty over fiscal policy had affected confidence, recruitment plans and investment decisions.
Despite the recent slowdown, the REC highlighted that overall job vacancies remain at historically good levels, with around 1.46 million jobs available across the economy. Some sectors even saw increases compared to the previous month, including advertisements for theme park attendants, warehouse control assistants and public relations directors.
However, retail and hospitality, two sectors already under pressure from rising costs, saw a sharp decline in active job postings, down 14.1 percent and 10.4 percent, respectively. Both sectors were hit hardest by the increase in employers’ social security contributions introduced in April.
In general, the number of job vacancies has been declining for about two years as the labor market gradually cools down after the pandemic. The Bank of England is closely monitoring job vacancy data, particularly the ratio of unemployed to available jobs, as part of its assessment of inflationary pressures and labor market tightness.
That ratio has risen steadily, from 1.8 unemployed people per job vacancy last year to 2.5 in July, indicating an easing labor market. Job openings are generally considered a forward-looking indicator that reflects employers’ confidence in future demand.
Attention now turns to the latest official employment and wage growth figures, released on Tuesday, covering the three months to October. The data will be closely watched by the Bank of England’s monetary policy committee ahead of its interest rate decision later this week.
Economists expect the unemployment rate to rise from 5 percent to 5.1 percent, the highest level since January 2021, along with a fall in monthly wages and salaries, reinforcing the view that the UK labor market continues to lose momentum.
