The UK’s Office for National Statistics (ONS), released its latest statistical bulletin on vacancies and jobs this morning. The estimated number of vacancies in August to October 2023 was 957,000, a decrease of 58,000 from May to July 2023. Vacancy numbers fell on the quarter for the 16th consecutive period in August to October 2023, down by 5.7% since May to July 2023, with vacancies falling in 16 of the 18 industry sectors.

In August to October 2023, total estimated vacancies were down by 257,000 from the level of a year ago, although they remained 156,000 above their pre-coronavirus (COVID-19) pandemic January to March 2020 levels.

The industry sector showing the largest annual decrease in the number of vacancies is professional, scientific, and technical activities, which fell by 35,000 from the equivalent period last year.

In August to October 2023, the ratio of vacancies per 100 employee jobs was 3.0, following a downward trend since April to June 2022, when it was at 4.1. Accommodation and food service activities currently has the highest ratio at 4.8, but follows a similar pattern, falling from 7.2 over the same period.

Despite the softer labour market figures, wages grew strongly. Annual growth in regular pay (excluding bonuses) was 7.7% in July to September 2023, this is slightly down on the previous periods but is still among the highest annual growth rates since comparable records began in 2001.

Annual pay growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)) for total pay rose on the year by 1.4% in July to September 2023, and for regular pay rose on the year by 1.3%.

Annual average regular pay growth for the public sector was 7.3% in July to September 2023 and is the highest regular annual growth rate since comparable records began in 2001. However, it was still outpaced by pay rises in the private sector which was up 7.8% 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 9.4%, followed by the manufacturing sector at 7.7%.

Responding to the latest figures, Michael Stull, Director at ManpowerGroup UK, said: “As cost-of-living pressures combine with significant talent gaps, wage growth at 7.7% in the quarter to September 2023 remains high and continues to be a keen area of focus for employers and candidates alike. Our advice to organisations who are facing this perfect storm of high inflation, skills shortages and economic stagnation, is to think carefully before making pay increases. While uncertainty remains so prevalent, our recommendation is to look instead at ways to retain existing staff by bolstering benefits packages and by offering opportunities to upskill and reskill, especially across the areas where talent shortages prevail.”  

Neil Carberry, REC Chief Executive, commented: “These figures are a further sign [of] demand in the labour market [which] - while much softer than a year ago - remains resilient. Vacancies remain higher than pre-pandemic. But the overall picture is more nuanced than a year ago, with temporary work and sectors like hospitality and healthcare doing better than permanent roles, and jobs in IT and construction. Pay is still rising - but this is now being driven by pay awards designed by employers to help staff facing rising prices, not labour market competition for staff.”

“Our stubborn economic inactivity rate shows why the Autumn Statement must deliver on welfare to work if we are to encourage more people to enter or re-enter the jobs market. Extending successful programmes like Restart would make sense.”

“The labour market is just marking time waiting for economic growth to return. Let’s have a plan from the Chancellor next week to get economic growth going, which will get more employers back into hiring.”