THE Office for National Statistics (ONS) said there were 197,000 more people in payrolled employment last month compared with April – the highest rise since these records began in 2014.
The data also reveals that the jobless rate dropped for the fourth month in a row, to 4.7 per cent between February and April – down from 4.8 per cent in the previous three months.
The ONS said that, for the first time since the pandemic struck, the hardest-hit sectors such as hospitality, accommodation, and arts and entertainment saw the strongest growth in payrolled workers.
It comes after indoor hospitality reopened on May 17 in a boost to cinemas, restaurants, pubs and bars, which have been battered by lengthy Covid-19 restrictions.
But there are fears for many firms after Prime Minister Boris Johnson confirmed on Monday that the June 21 full lifting of pandemic restrictions will be delayed by a month.
The ONS data also showed that, despite six months of increases, payrolled worker numbers have still fallen by 553,000 since the pandemic it.
Niamh Corcoran, policy adviser, North East England Chamber of Commerce said the statistics were a casue for “cautious optimism”.:
She said: “The figures continue to show the recovery of the labour market with unemployment falling and employment rising in the North-East this quarter.
“Nationally vacancies have returned to pre-pandemic levels and payrolled employment has increased by 197,000 suggesting there has been a surge in recruitment over recent months.
“Whilst the figures should be cause for ‘cautious’ optimism, we are not out of the woods yet. The extension of restrictions and the unwinding of the Job Retention Scheme could pose a threat to this recovery and cause a spike in redundancies later in the year.
“In addition, there are still deep-set issues in the labour market which Government needs to focus on to sustain this recovery.
“The national figures show that the numbers of people in long-term unemployment has reached the highest levels in five years. Government needs to do more to prevent people falling into long term unemployment and support unemployed workers into good jobs in growing sectors or into upskilling and reskilling programmes if needed.”
Chamber member Saggezza’s business clearly illustrates the statistics. It has offices across the US and India – as well as London and Sunderland – and is recruiting for a range of roles in Birmingham, Edinburgh, London and the North-East, having recently exceeded the 100 employee mark in the UK.
The company’s decision to continue increasing its footprint follows a rise in demand for its services during the pandemic, as companies the world-over were forced to suddenly shift their focus to digital transformation and coincides with the company’s bold ambition to double its headcount by 2022.
Martin Williams, managing director at Saggezza UK, said: “Today’s figures are good news for the North-East and UK and we’re proud to have played a supporting role in aiding the nation’s economic recovery as we re-emerge from the Covid crisis.
“Over the past 12 months, we’ve created scores of jobs at our offices in London and Sunderland and are delighted to be in a position to continue growing our UK footprint as we prepare for life post-pandemic.
“Ever since we opened our first Saggezza UK office in London, back in 2011, we’ve been blown away by the year-on-year growth the company has charted and the overall contribution our staff have made to the global business.
“Be it delivering complex solutions for global banking giants, or working on joint projects with our teams in India and the US to improve the customer journey for high street retailers, we could never have achieved this had it not been for the dedication of our employees to always deliver for our clients, and the company’s continued commitment to the UK is the perfect testimony of that.
“Through our many digital transformation services, our staff are not only changing the way we do business, but are helping change the world, and I’d encourage anyone seeking to explore a career in tech, or existing tech professionals seeking a new challenge, to get in touch with the team and explore the opportunities on offer. It’s a really exciting time for the business.”
Sam Beckett, ONS head of economic statistics, said: “The number of employees on payroll grew strongly in May, up by almost 200,000, although it is still over half a million down since the pandemic struck.
“Job vacancies continued to recover in the spring, and our early estimates suggest that, by May, the total had surpassed its pre-pandemic level, with strong growth in sectors such as hospitality.”
Job vacancies rocketed by 24 per cent quarter on quarter – up 147,000 to 758,000 between March and May, thanks to a hiring spree across these sectors amid reports of some firms resorting to financial incentives to attract workers.
Vacancies are now just 27,000 below levels seen before the pandemic, with most industries having fully recovered, according to the ONS.
Chancellor Rishi Sunak said: “Our Plan for Jobs is working – the latest forecasts for unemployment are around half of what was previously feared and the number of employees on payroll is at its highest level since April last year.”
The ONS data showed that total unemployment fell by 90,000 to 1.6 million, while employment rose by 113,000 to 32.5 million between February and April.
The claimant count – another measure that includes people working with low incomes and hours, as well as people who are not working – fell by 92,600 month on month to 2.5 million in May.
But unemployment has been kept in check by the furlough scheme, with around three million people still on the wage support, which ends in September and has not been extended despite the delay to the full lifting of restrictions.
The data revealed there was also a record jump in earnings, with pay excluding bonuses up 5.6 per cent in the quarter to April, though the ONS said this compares with a big fall a year earlier, while many jobs axed in the pandemic have also being lower-paid roles.
Investec economist Sandra Horsfield said the data shows the jobs recovery is “well under way”.
“That said, the big unknown remains how firms’ staffing plans will evolve once the support from furlough schemes is gradually withdrawn.”
The delay to lockdown lifting could also have knock-on effects on hiring for some firms, she added.