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Big Picture - July 2014

Paystream News

Paul Malley

Tuesday 29th Jul, 2014

Busier times! The Gross Domestic Product (GDP) in the UK expanded 0.80 percent in the first quarter of 2014 over the previous quarter. GDP Growth Rate in the UK averaged 0.62 percent from 1955 until 2014, so we are clearly in a period of relatively strong growth.

According to the REC/KPMG job report in June, there was a considerable reduction in the availability of staff for both permanent and temporary/contract roles. In fact it was the sharpest decline on the permanent side in the survey history, which began in October 1997 and the greatest on the temporary/contract side since March 1998. Inevitably this is beginning to push salaries and rates, and will continue to do so until labour demand and supply begin to balance out again. It is therefore not surprising that unemployment fell by 121,000 to 2.12 million in the three months to May per the Office for National Statistics (ONS).

In a growing market, with pressure on salaries and rates, competition for good people of course increases as well and differentiating our businesses to attract and retain such candidates becomes critical. After several years of the labour supply outstripping the demand, these are nice problems to have!

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