Job Seekers Allowance Latest Analysis November Unemployment in Devon For the first time since July the number of people claiming Job Seekers Allowance in Devon has fallen from 9,556 in September to 9,516 in October, this represents a 0.4% decrease month on month and follows the national trend (UK) where there has been a 1% decrease. As the decrease is only slight, this has had no impact on the rate of people aged 16-64 claiming JSA and this remains the same at 2.1%. Encouragingly the rate of unemployment in Devon remains below the UK average of 3.9% as well as our neighbouring authorities, a trend which has been apparent post recession. JSA claimant count rates as at October 4.5 % of working age population 4.0 3.5 3.0 2.5 2.0 1.5 1.0 Devon Somerset Plymouth UK Torbay Source: ONS Nomis November The decrease in claimant count this month comes as a slight surprise in view that GDP output remains weak and other indicators suggest a slowdown in the economy. During the summer months claimant count did not follow the usual downward trend linked to seasonal employment. Instead, from July to September claimant count increased month on month, indicating that there were less seasonal job opportunities than last year, or Briefing: Monthly economic update. Page 1 of 6
that seasonal opportunities are having less impact due to current market conditions and welfare reforms. Last year the number of people claiming JSA continued to fall all summer, yet increased between September and October. This could be indicative of businesses being reluctant to take on additional staff due to the economic uncertainties nationally and globally. It is encouraging that the number of people claiming JSA appears to have remained relatively static this month but it is important to note that the claimant count is a month behind and the effects of ending seasonal employment may not have filtered into the figures yet. JSA claimants - Devon from October 2010 - October 10,500 2.5 Total number of claimants 10,000 9,500 9,000 8,500 8,000 7,500 2.0 1.5 1.0 0.5 % of working age population (16-64) 7,000 Oct- 2010 Nov- 2010 Dec- 2010 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- 0.0 Source: ONS Nomis November Total number of claimants % of working age population (16-64) Despite the decrease in October, the number of people claiming JSA is 15.8% higher than this time last year. In October 2010 there were 8,215 people claiming JSA. According to the latest labour market outlook research published by the Chartered Institute of Personnel and Development (CIPD) in November, many firms appear to be locked in wait and see mode. It also found that some companies are scaling back on all employment decisions against a backdrop of increasing uncertainty as a result of the Eurozone crisis and wider global economic turmoil. More employers are expected to reduce staff numbers rather than increase them over the next three months and over the next year. However, the research also found that the slowdown in economic growth had not yet led to an increase in the rate of redundancies. If the findings from the national research are reflected at a local level, it could indicate that the bulk of redundancies have already been made. The latest quarterly bulletin revealed that there are now more people working part time, a phenomenon apparent across the country. Clearly firms have been keen to maintain their existing skilled workforces and not incur the expense of additional recruitment until business picks up. Anecdotal evidence suggests that this is also the case amongst some firms across Devon and data shows that the number of males working part time has increased by 9.7%. However, if firms are scaling back on recruitment of additional staff as the national research identifies, this is not good news for the people that remain on the unemployment register who are seeking work. Consequently, the number of people claiming JSA is likely to remain at the rates we have been seeing, for the foreseeable future, until activity and Briefing: Monthly economic update. Page 2 of 6
confidence improves. This is particularly bad news for young people looking to get their first foothold in the jobs market. Youth unemployment Between September and October the number of people aged 24 and under claiming JSA in Devon has decreased from 3,165 to 3,115 representing a 2% drop month on month. This follows the trend seen nationally (UK) where the number of people claiming JSA has also fallen by 2%. The slight drop off in the number of people aged 24 and under claiming JSA this month, is likely to be reflective of people moving off the register as they enter full time education or training as anticipated in last months briefing. In Devon there has been little change proportionately of those aged 24 and under claiming JSA pre and post recession (generally youth unemployment makes up a third of total claimant count). In October, youth unemployment in Devon accounted for 32.8% of total claimant count which is just above the UK average of 30.9%. When this figure is looked at in isolation it presents concern, however, if youth unemployment is calculated against the proportion of the resident population of the same age it stands at just 4.9% compared to the South West and UK averages of 5.6% and 8% respectively. Nonetheless, compared to the age groups 25-49 (2.1%) and 50 to 64 (1.1%), this age group maintains the highest proportion of people claiming JSA and in number terms has increased compared to October 2010. 4,500 Youth unemployment Devon - Aged 24 and under claiming Job Seekers Allowance from June 2008 - October 34.0 Number aged 24 and under 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 33.0 32.0 31.0 30.0 29.0 28.0 27.0 % of total JSA claimant count 0 Jun-2008 Jul-2008 Aug-2008 Sep-2008 Oct-2008 Nov-2008 Dec-2008 Jan-2009 Feb-2009 Mar-2009 Apr-2009 May-2009 Jun-2009 Jul-2009 Aug-2009 Sep-2009 Oct-2009 Nov-2009 Dec-2009 Jan-2010 Feb-2010 Mar-2010 Apr-2010 May-2010 Jun-2010 Jul-2010 Aug-2010 Sep-2010 Oct-2010 Nov-2010 Dec-2010 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- 26.0 Source: ONS Nomis November Number of claimants aged 24 and under % of total claimant count Even during healthier economic times unemployment in the UK tends to disproportionately affect 18 to 24 year olds despite various policies which have been introduced to tackle the issue. Young people tend to have less work experience so businesses are often reluctant to recruit this age group. This position has intensified due to the influx of people into the labour market who have more experience, increasing the Briefing: Monthly economic update. Page 3 of 6
competition for each available vacancy. For Devon as a whole there were 2.2 people chasing each vacancy in October, this is an improvement on the ratio last month where there were 3.1 people chasing each vacancy, indicating a reduction in competition for available jobs, which is encouraging sign for young people currently unemployed. In recent years there has been growing concerns around youth unemployment leading to initiatives at a national and local level being introduced to help tackle this issue. Devon County Council was successful in bidding for funding from the Future Jobs Fund, the first round of funding allowed us to run employment programmes between November 2009 and April 2010. The County Council was awarded a second round of funding to run until October 2010 to support at least another 150 young people directly into work. Over the duration of the project 294 young people were helped into work. Tackling youth unemployment remains one of the Government s top priorities and they have announced a wide-ranging package to ensure that young people have the skills needed to compete in the global economy including measures to support vocational training. Together with the Work Programme and the Government s Work experience scheme it will mean support for up to 150,000 young people over the next few months and 250,000 people over the next two years. The Department for Work and Pensions (DWP) have recently announced that they will be launching sector-based work academies across England to tackle youth unemployment. The Government also intends to reduce the bureaucracy around Apprenticeships to encourage take-up and are introducing a new Access to Apprenticeships pathway. Devon County Council are currently investing in excess of 150,000 worth of projects to help support young people access the labour market. The projects range from provision of high quality work placements through to schemes to encourage apprenticeships and projects aimed at supporting employers to grow their businesses. It is hoped that these initiatives will help to provide young people with the necessary skills and experience to increase their chances of finding long-term employment. Labour market churn Despite the uncertainty in the economy, there is still considerable activity in the labour market with over 6,000 people moving on and off the claimant count this month. The number of on-flows has increased from 2,286 to 3,087 and the number of off-flows has increased from 2,121 to 3,105 between September and October. This indicates that there is greater churn within the labour market, the destinations of people leaving the claimant count and the number of vacancies will help to confirm this position. Briefing: Monthly economic update. Page 4 of 6
JSA on-flows vs off-flows 3,400 3,200 3,000 2,800 Number 2,600 2,400 2,200 2,000 1,800 1,600 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Source: ONS Nomis November Off-Flow On-Flow Destinations of off-flows There are a number of different reasons why people leave the claimant count. The most common reason tends to be because people have found work, or increased work to over 16 hours per week. This month 1,225 people stopped claiming JSA because they had found work. This is higher than last month, where 925 left for this reason, which is particularly encouraging. As expected the number of people leaving the claimant count because they have entered education or training has increased from 45 to 120 this month. The number of people who stopped claiming JSA because they failed to sign on increased from 605 to 1,060, so it is unknown whether these people will have gone into employment or not. Destinations of people leaving the claimant count - Devon October Found work or increased work to more than 16 hours a week Failed to sign Not known Education or approved training Gone abroad Ceased claiming Other reasons Claimed benefit other than JSA Government supported training 0 200 400 600 800 1,000 1,200 1,400 Number of claimants Source: ONS Nomis November Briefing: Monthly economic update. Page 5 of 6
Vacancies The number of notified vacancies to Job Centre Plus has risen from 3,606 in September to 6,006 in October, this represents a 67% increase month on month. The number of live unfilled vacancies has also increased month on month from 3,124 in September to 4,339 in October. This is particularly encouraging considering national research is pointing towards a scale back in recruitment over the next three months. This could be indicative of businesses preparing for an increase in activity in the lead up to Christmas. The number of available vacancies is higher than this time last year, so perhaps is a sign of a slight increase of business confidence amongst local businesses despite the negative picture which is being painted nationally. Jobcentre Plus vacancies - Devon from October 2010 -October 7,000 6,000 Total number of vacancies 5,000 4,000 3,000 2,000 1,000 0 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Notified vacancies Live unfilled vacancies Source: ONS Nomis Jobcentre Plus vacancies November Spatial Breakdowns To see how your area compares please refer to Devonomics http://www.devonomics.info/ The latest District and Parliamentary Constituency breakdowns can be accessed via: http://www.devonomics.info/node/252 and http://www.devonomics.info/monthly-briefings Briefing: Monthly economic update. Page 6 of 6