UK Economy back in Recession

Article by: Siamak Taslimi

The Job Market outlook in 2013 in numbers is very similar to 2012 but there will be a very gradual shift from part-time to full-time jobs. Unfortunately the UK economy is on course for triple dip recession in 2013.

2012 UK Economy performance in brief:

• Q1 – 2012 GDP Rate: – 0.3%
• Q2 – 2012 GDP Rate: – 0.4% (drop due to extra holidays)
• Q3 – 2012 GDP Rate: +0.9% (growth- due to the Olympic Games)
• Q4 – 2012 GDP Rate: – 0.3% (Back to reality)

The bad news is that the economy shrank by 0.3% in 2012. The good news is that the economy will do better in 2013. What about the tripe rescission, well we are in it right now and I expect the economy will pull out of it by summer. Do not expect a miracle, the recovery if any will be very slow through the later part of 2013. The economic outlook for the next few years (assuming no policy change) will be very similar, an anaemic growth rate (if lucky between 0.5%-0.1%)

What about Unemployment?

Unfortunately the unemployment will stay around the 7.6% to 7.8% range, and most of its fluctuation will be due to government schemes and pat-time job market movement. I do not anticipate any substantial change of circumstances in the three key driving factors in UK economy i.e.;

1. No increase in Government expenditure (austerity policy rather than growth)
2. More economic shrinkage in EU (even more austerity planned)
3. NO US economic recovery (even if it comes, due to economic lag the effect will not be felt this year)

Job Market outlook in 2013

There are more than 2.5 million unemployed people in the UK. But there are also about 500,000 job vacancies. It is obvious that we need a lot more vacancies to get unemployment down and we are not going to get them soon. But the key factor for job seeker to remember is that, the UK economy generate more that 3,000,000 jobs every year and almost as many change job. So in 2013 more than 6 million jobs will come to the market, you just have to be ready to take it. Best of luck with your job search in 2013.

UNITED KINGDOM GDP GROWTH RATE

The Gross Domestic Product (GDP) in the United Kingdom expanded 0.90 percent in the third quarter of 2012 over the previous quarter. GDP Growth Rate in the United Kingdom is reported by the UK Office for National Statistics. Historically, from 1955 until 2012, the United Kingdom GDP Growth Rate averaged 0.62 Percent reaching an all time high of 5.30 Percent in March of 1973 and a record low of -2.50 Percent in June of 1958. The United Kingdom is the world’s seventh largest economy. Like in the case of many other developed nations, services is the biggest sector of the economy and accounts for more than 75 percent of total GDP. The key segments within Services are Distribution, Transport, Hotels and Restaurants (18 percent of total GDP), Government, Health and Education (20 percent); Professional and Support (11 percent); Financial and Insurance (9 percent) and Real Estate (9 percent). Although the United Kingdom is still one of the biggest manufacturers in the world, production constitutes only 10 percent of the GDP. Last big component of the GDP is Construction, which accounts for around 7 percent of total output. This page includes a chart with historical data for the United Kingdom GDP Growth Rate.

U.K Unemployment Rate Stable at 7.8 Percent in October

The employment rate for those aged from 16 to 64 was 71.2 per cent, up 0.1 on the quarter and up 0.9 on a year earlier. There were 29.60 million people in employment aged 16 and over, up 499,000 on the quarter.

The unemployment rate was 7.8 per cent of the economically active population, down 0.2 on the quarter and down 0.5 on a year earlier. There were 2.51 million unemployed people, down 82,000 on the quarter and down 128,000 on a year earlier.

The inactivity rate for those aged from 16 to 64 was 22.6 per cent, up 0.1 on the quarter but down 0.6 on a year earlier. There were 9.07 million economically inactive people aged from 16 to 64, up 60,000 on the quarter but down 249,000 on a year earlier.

Total pay (including bonuses) rose by 1.8 per cent on a year earlier. Regular pay (excluding bonuses) rose by 1.7 per cent compared with the previous year.