Labour market Reports
Labour Market Outlook at a glance
Published: 18 October 2007
Description
This report provides an outlook for the labour market over the two years to March 2009. This report is produced quarterly.
Link to full report
Labour Market Outlook HTML | PDF [ 104 KB, 7 pages]
Summary
Short term - the labour market will remain tight with increased employment, low unemployment and continuing high labour force participation.
Medium term – employment growth is expected to ease slightly but unemployment is expected to remain low on a historical basis.
Continued pressure - is expected on some aspects of the labour market including wages, skills and the supply of labour.
| Actual | Projections | |||
|---|---|---|---|---|
| Mar 2006 | Mar 2007 | Mar 2008 | Mar 2009 | |
| Growth (annual % change) | ||||
| GDP (annual average) | 2.7 | 1.7 | 2.6 | 2.0 |
| Employment | 2.6 | 1.7 | 1.6 | 1.0 |
| Labour force | 2.7 | 1.6 | 1.6 | 1.1 |
| Working-age population | 1.4 | 1.4 | 1.3 | 1.3 |
| Rates (%, March quarters) | ||||
| Unemployment | 3.9 | 3.7 | 3.8 | 3.9 |
| Labour force participation | 68.5 | 68.6 | 68.8 | 68.7 |
Key indicators
Economic growth – recovered from a 7-year low in with strong growth in the March and June 2007 quarters. Economic growth is expected to continue to rise in the year to March 2008 before easing somewhat in the year to March 2009.
Employment growth - is expected to remain positive over the next year but will be low compared to the past five years. Employment growth is expected to ease in the March 2009 year to 1.0%.
Labour productivity - growth of about 1% per annum is expected over the next two years. Positive labour productivity growth is expected due to a tight labour market, recent increases in wage costs and a period of sustained investment in plant and machinery.
Net migration - inflows are expected to fall further in the coming year before recovering to around the long run average of 10,000 in the medium term.
Wage growth is likely to remain strong in the year ahead given the very low unemployment rate, the demand for labour remaining high and a shortage of skilled labour. Further out, an expected slowdown in economic growth coupled with lower employment growth will act to dampen wage pressures.
Participation rate - expected to remain high and relatively stable over the next two years. Increases in participation due to people being encouraged into the labour market by relatively high wage and employment growth will be offset by decreases due to the ageing population.
Unemployment rate - expected to rise marginally over the next two years due to modest employment growth. However, the unemployment rate is still expected to remain low on a historical basis at below 4.0%.
Related information
The Employment and Unemployment report which comments on the latest Household Labour Force Survey release.
Future updates
This is a regular report – the next update is due in April 2008. Reports from previous periods can be found in the archive.
Author or contact details
For further information please contact the Labour Market Analysis team.