The number of job vacancies in the UK for the period from July to September 2023 stood at 988,000, a decrease of 43,000 from the April to June 2023 period, according to the latest data from the Office for National Statistics.

Vacancy numbers fell on the quarter for the 15th consecutive period in July to September 2023, down by 4.2% since April to June 2023 with vacancies falling in 14 of the 18 industry sectors.

In July to September 2023, total vacancies were down by 256,000 from the level of a year ago, although they remained 187,000 above their pre-Covid-19 pandemic January to March 2020 levels. 

On a quarterly basis, real estate activities and administrative and support service activities decreased the most, falling by 29.6% and 15.5%, respectively. The largest growth was in mining and quarrying, at 11.1%.

When comparing July to September 2023 with the same time last year, total vacancies decreased by 20.6%, with falls in 15 of the 18 industry sectors. The industry that decreased the most was human health and social work activities, where the number of vacancies fell by 40,000.  

ONS data for the June to August 2023 period showed annual growth in regular pay (excluding bonuses) was 7.8% in June to August 2023, similar to recent periods and one of the highest regular annual growth rates since comparable records began in 2001.

Annual growth in employees' average total pay (including bonuses) was 8.1% in June to August 2023; this total growth rate is affected by the NHS and civil service one-off payments made in June, July and August 2023.

Annual growth in real terms (adjusted for inflation using Consumer Prices Index including owner occupiers' housing costs (CPIH)) for total pay rose on the year by 1.3% in June to August 2023, and for regular pay rose on the year by 1.1%.

Further data from the ONS showed annual average regular pay growth for the public sector was 6.8% in June to August 2023 and is the highest regular annual growth rate since comparable records began in 2001. For the private sector this was 8.0% and among the largest annual growth rates seen outside of the coronavirus (Covid-19) pandemic period.

The finance and business services sector saw the largest annual regular growth rate at 9.6%, followed by the manufacturing sector at 8.0%; this is one of the highest annual regular growth rates for the manufacturing sector since comparable records began in 2001.

Neil Carberry, REC chief executive, said, “Pay is up strongly again as some sectors, such as hospitality engineering and logistics continue to experience labour shortages. But the main driver of higher pay is now 2023 pay settlements, which are still in the annual date. These were high as firms reacted to the shortages of 2022 by paying existing staff more to retain them and cushion against inflation.”

Carberry continued, “A very large increase in the National Minimum Wage has also driven the annual figures up. We would expect pay growth to fall with inflation next Spring as 2024 pay awards will not be as high. It will be important for the Low Pay Commission to have this in mind when setting the minimum wage for 2024, too.”

Tania Bowers, Global Public Policy Director at the Association of Professional Staffing Companies (APSCo), said, “The decline in vacancies once again is no surprise, but I would warn employers and recruiters not to be complacent. When we look at the details in the latest ONS labour market update it’s clear that the UK is still reporting higher vacancies than it did pre-pandemic.”

“With the latest statistics also including the data from August, when we expect a seasonal lull in hiring, these figures don’t suggest that the labour crisis is over. Indeed, what I find perhaps more concerning is the increase in jobs noted since January to March 2020 in skill-short sectors such as manufacturing and education, which reported 38.7% and 33.1% growth respectively,” Bowers said.

“The country is still in the midst of a worrying dearth of key resources, with many employers struggling to find the talent they need through domestic hiring, and international resources difficult to recruit post-Brexit,” Bowers said. “As the Autumn Statement nears and the major political parties gear up for next year’s election, skills need to be the focus for policymakers.”

Chris Gray, Director at ManpowerGroup UK, said, “Employers continue to show signs that they’re interested in hiring but there is less action underway to back up this intent, as they take stock of uncertainties which include high costs, a changing political landscape, and evolving expectations and demands from within the workforce. As such we’re seeing a gradual decline in jobs vacancies, with the numbers lowering for a 15th consecutive month.  While the 988,000 vacancies advertised is still high, this cooling trend is a slow reset of the labour market, back towards pre-pandemic conditions.”

Gray said, “The tug of war between employers and employees over wages has undoubtedly impacted on this reset – putting the brakes on in many sectors, as businesses grapple with skills shortages and the need to attract new talent while also working hard to retain existing employees by supporting them with the impact of high inflation on the cost of living.  It’s a mixed picture overall but still with many reasons to be cautiously optimistic, not least for our retail, leisure and hospitality sectors which should see some seasonal uplift as we begin to approach the festive period.”