Page last updated at 03:51 GMT, Monday, 10 November 2008

Employers gloomy on job creation

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Employers are predicting a 'reduction in headcount'

Employers are becoming increasingly gloomy about job creation in the wake of the current financial crisis, a report suggests.

The Chartered Institute of Personnel said its staff recruitment index, based on more than 700 employers, was at its lowest level since it began in 2004.

There was a major drop in the balance between those expecting to recruit staff and those about to cut jobs.

Meanwhile a CBI report shows a huge fall in jobs at small to medium firms.

It predicts gloomy months ahead as demand for UK-made goods weakens at home and abroad.

Russell Griggs, of the CBI, said: "After more than a year of steady growth on the jobs front, we are now starting to see SMEs (small and medium-sized enterprises) reducing their headcount in response to weakening demand in the face of global economic slowdown."

In October figures showed that the number of people out of work in the UK had soared in the three months to August by 164,000 compared with the previous quarter - the biggest rise for 17 years.


The CIPD's survey showed the balance between firms expecting to recruit staff in the next three months and those about to cut jobs had fallen from plus 41 a year ago to plus 2 now.

More than 80% of employers polled by the CIPD said they believed economic conditions in the UK would get worse, and only 1% predicted an improvement.

CIPD chief economist John Philpott, said: "The year after the impact of the credit crunch was first felt saw the UK labour market move from a state of buoyancy to one of stagnation.

"We are now at the start of a period of contraction, with jobs being lost, new jobs hard to come by and, as this week's official statistics are set to confirm, unemployment on an ever sharper upward rise.

"With pay increases at best modest for those still in work, the harsh chill of recession will make this the toughest winter for UK households for almost two decades."

The study comes after a week in which Jaguar Land Rover and steelmaker Corus both announced a large number of job cuts.

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