November 2017

Labour Market Bulletin

Employment

Table 2 v 2 Employment

Source: Annual Population Survey (APS)

Warwickshire’s working-age employment rate currently stands at 78.7%, an increase of 1.7% from the previous quarter. The employment rate in terms of its size and growth has historically surpassed both regional and national levels and continues to indicate a strong local labour market. A growth rate six times faster than the national average is mainly driven by high employment growth in Nuneaton & Bedworth where the proportion of working-age residents has increased by 8.4% over the last year. In addition, more than 80% of working-age residents are employed in North Warwickshire (85%), Rugby and Stratford-on-Avon. As highlighted in the previous issue, Warwickshire is currently fluctuating around its full employment position. This is defined as a position in the economy, where all available labour is fully utilised and in work i.e. zero cyclical unemployment.

What is driving a high employment rate in Warwickshire?

Figure 1: Full-time employment over time (2011-17)

 

employment graph

Figure 2: Part-time employment over time (2011-17)

graph 2 employment

Source: APS

Figures 1 and 2 highlight Warwickshire’s changes in full-time and part-time employment relative to the national average over the last five years. Both graphs show that Warwickshire’s full-time employment rate has generally accelerated at a faster rate (3%) compared to part-time employment, particularly during 2014-16. In contrast, England only saw marginal growth averaging 1% over the same period. With more than 80% of Warwickshire’s working age population in full-time employment last year, the latest data highlights that the proportion of full-time employment has shrunk whilst part-time employment has risen considerably for the first time in three years. North Warwickshire and Warwick particularly saw the largest growth in part-time employment over the last year, of 9.7% and 4.1% respectively.

An upward shift in part-time employment may be a short-term movement but it can signal different trends. On the demand-side, it can represent strong service-orientated industrial activity with key industries such as accommodation and food typically having a higher-than-average part-time share. Alternatively, firms may be utilising the labour market to employ workers flexibly so they can respond to cyclical threats most effectively. The recent uncertainty around hiring workers full-time could be loosely linked to the Brexit outcome last year. However, in the long term, a rise in flexible, part-time contracts is a contributory factor towards wage stagnation and the productivity puzzle.

On the supply-side, growth in part-time employment may also reflect demographic change, with part-time employment traditionally linked to the under 25s, older workers and female participation. Increases in higher education participation, retirement postponement or childcare responsibilities amongst the population can impact the nature of the employment rate, where part-time prospects may act as an ideal alternative to working full-time. Future changes in the part-time employment rate will be monitored in subsequent quarters of the Labour Market Bulletin.

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