Uncertainty can lead employers to sit on their handspublished at 09:05 GMT
09:05 GMT
Simon Jack
Business editor
Today’s figures suggest the job market is still weak.
Employers are still reluctant to take people on for a number of reasons we saw last year: there was a big increase in employers’ National Insurance contributions, increases in the National Living Wage, particularly for young people, and there’s uncertainty around the Employment Rights Act. We also had a late Budget.
All of that creates uncertainty, so employers kind of sit on their hands.
The good news is that the hiring freeze seems to be thawing just a little bit. The number of vacancies out there has kind of levelled off. But overall you could say that this is still a pretty weak employment market.
We’re seeing the biggest falls in employment in retail and hospitality. This sector employs quite a lot of young people, and people either at or close to the National Living Wage.
The broader picture is that a lot of these uncertainties came at precisely the moment in the wider economy when employers were thinking: ‘how many people do I actually need? Can I get automation? Can I deploy AI?’
People are getting a bit more expensive and a bit riskier – so they’re thinking of other ways to invest in the business, in capital rather than labour.