UK graduate labour market update: 16 March

In the latest edition of Charlie Ball's labour market update, brought to you by Prospects at Jisc: a report on how the careers of parents are affected following the arrival of a child, and data on how many jobs are being advertised as 'remote working'

UK gross domestic product (GDP) is estimated to have fallen by 2.9% in January:

• Falls in consumer-facing services industries and education drove a contraction of 3.5% in the services sector in January 2021.
• The largest contributor to the fall was wholesale and retail trade, followed by education services, accommodation and food service activities, and other service activities such as hairdressing, because of the reintroduction of restrictions across the UK. There was growth in five sub-sectors, most notably in health activities, and information and communication services.
• Production declined by 1.5% in January 2021 with contractions in two out of the four sub-sectors. The manufacturing sub-sector contracted by 2.3%, the first decline since April 2020, largely driven by a fall in exports. Nine out of the 13 manufacturing sub-sectors declined - the largest negative contribution came from the manufacture of transport equipment sector, which contracted by 11.1%. This was driven by a decrease in the manufacture of motor vehicles industry of 16.9%.
• Mining and quarrying continued to decline, decreasing by 0.7% in January 2021. Oil and gas extraction has seen large declines since June 2020, mainly due to tightened restrictions impacting on demand. Electricity, gas, steam and air conditioning supply increased by 0.9%, while water supply increased 1.2% in January 2021. The construction sector grew by 0.9% in January 2021, driven by growth in new work.
• Construction output grew by 0.9% in January 2021 following a fall of 2.9% in December 2020. The monthly growth was driven by a rise in new work of 1.7% offset by a small contraction in repair and maintenance of 0.4%.
• The growth in new work was driven by private commercial and infrastructure which grew by 4.5% and 3.1% respectively.
• January's GDP was 9.0% below the levels seen in February 2020.

The latest round of the Office for National Statistics (ONS) fast response experimental statistics on the impact of COVID were released on 11 March:

• 19% of the UK workforce is currently furloughed.
• 36% of the workforce worked exclusively from home in the last week.
• 48% of the workforce travelled to work at least once last week.
• In the week to 6 March 2021, overall retail footfall in the UK was at 42% of its level in the equivalent week of 2020.
• UK online job adverts in the week ending 5 March 2021 were 85% of the level seen in the same week last year.
• Online job adverts as a proportion of their level in the same week last year decreased in 17 of the 28 Adzuna categories and increased in nine.
• Manufacturing saw the largest weekly decrease but remains at 130% of its level seen in the same week last year.
• IT, computing and software increased by 12 percentage points to 109% of its level seen in the same week last year. This was followed by the 'scientific and QA' category, which saw a weekly increase of 11 percentage points to 116% of its level seen in the same week last year.

We also see the next instalment of the fortnightly business survey (BICS) about financial performance, workforce, prices, trade, and business resilience.

• The percentage of currently trading businesses experiencing a decrease in turnover in mid-February 2021 compared with normal expectations for this time of year, has fallen by two percentage points since early February, to 44%.
• The accommodation and food service activities industry had the highest percentage of businesses experiencing a decrease in turnover compared with normal expectations, at 73%.
• The percentage of businesses whose turnover has not been affected has remained stable at 38% since early January 2021, while the percentage of businesses experiencing an increase in turnover has risen from 6% in mid-January 2021 to 8% at the beginning of February.
• More than half of businesses in the other service activities industry (which includes hairdressing and other beauty treatment activities), and the accommodation and food service activities industry (56% and 51%, respectively) have been reporting three months' or less cash reserves since mid-December.
• 60.5% of the workforce of the arts, entertainment and recreation industry was on furlough leave in mid-February 2021.
• The main challenge reported by currently trading businesses for exporting was additional paperwork, at 40%, but was a change in transportation costs, at 42%, for importing.

And finally the ONS have released a summary of the effect of COVID over the last year:

• COVID-19 was the underlying cause of more deaths in 2020 than any other infectious and parasitic diseases had caused in any year since 1918. That year there were just over 89,900 deaths from various infectious and parasitic diseases registered in England and Wales.
• In the last week of January 2021, more than 5,000 adult critical care beds a day were occupied in hospitals in England, compared with around 3,000 a day in the same week in 2020.
• The average number of hours worked in the UK per person per week fell to 25.9 in April to June 2020, compared with 32.3 in the same three months of 2019.
• Accommodation and food services industries, which included people furloughed from closed pubs, hotels and restaurants, recorded a 54% fall in average weekly hours worked in April to June 2020, with 13.0 hours per worker on average compared with 28.4 in the same three months of 2019. Other industries saw less significant falls. For example, in financial, insurance and real estate services, where many workers were likely to be able to do so from home, the average in April to June 2020 was down 6% on the same period of 2019.
• By October to December 2020, average weekly hours worked had increased but were still down by 7% overall on the same period of 2019.
• For many industries, the fall in job vacancies during 2020 was bigger than the 2008 economic downturn.
• The Vacancy Survey shows that vacancies fell 38%, from 701,000 in January to March 2008 to a low of 432,000 in April to June 2009 before rising again.
• In comparison, quarterly vacancies stood at 802,000 across the UK in October to December 2019 and fell by 57% to a low of 343,000 in April to June 2020, during the first lockdown. By October to December 2020, the number of vacancies had risen to 590,000, down 26% on the same three months of 2019.
• Most industries recorded fewer vacancies in October to December 2020 than the same period the year before. In the accommodation and food service sector, which had been affected by lockdowns and social distancing, there were 29,000 vacancies in these three months, down 66% from 86,000 in the same three months of 2019.
• The value of imports and exports fell more during the first three months of the pandemic than during the 2008 and 2009 economic downturn.
• Unlike the 2008 and 2009 economic downturn, average house prices increased while the economy shrank.
• The largest month-on-month rise on record in people's expectations for unemployment to increase was after March 2020, most of which was before the lockdown started. Expectations increased by 30 points (17.8 in March to 47.8 in April), followed by a further rise in May 2020 (49.4).
• This meant that people's expectations for unemployment to increase reached the highest level in over eight years. The previous highest was in January 2012 (49.6), which followed the peak of unemployment after the 2008 and 2009 economic downturn.

The Jobs Recovery Tracker from Recruitment & Employment Confederation (REC) and EMSI is back with results for the first week in March:

• There were 137,000 new job adverts posted in the first week of March 2021, giving a total of 1.33 million active job adverts in the UK.
• There were 52% more new job adverts posted in early March 2021 than in the first week of April 2020, and 31% more than the first week of July 2020.
• However much of the jobs growth seems to be coming in non-graduate construction roles and in roles linked to hospitality in anticipation of a relaxation of current restrictions.

A good deal of evidence and comment has emerged suggesting a widespread shift to remote working, so here is a timely and evidence-based corrective from Indeed.

• Since April 2020, employers have been asked an optional question: 'Can this job be performed remotely, meaning primarily from home?' Possible responses are 'yes', 'temporarily due to COVID-19' or 'no'. The answer is added to the job description.
• 60% of remote jobs posted by employers on Indeed UK were marked as 'temporarily remote' during Lockdown 3 in early 2021.
• During Lockdown 2 in late 2020, only 30% of remote jobs were so marked.
• Even in occupations that were office-based before the pandemic, but shifted radically toward remote work in lockdown - like software development, marketing and finance - most remote postings are now described as temporarily remote.
• Most of the ten occupations with the highest overall share of remote postings are white-collar, office-based jobs. Even in these occupations, between 52% and 78% of remote postings were marked as temporarily remote in Lockdown 3 through the end of February.
• However, around 40% of remote postings are still described as non-temporarily remote.
• Jobseeker interest in remote work remains elevated, with searches for remote jobs on Indeed up fivefold as a share of all searches over the past year.

The Centre for Cities have updated their High Street Recovery Tracker:

• The third lockdown has had a much bigger impact than the second one. While the weekly minimum reached in November was 32% of pre-pandemic levels, in February 2021 it was ten percentage points below that - closer to April 2020 levels.
• In smaller cities footfall jumped to 50% of pre-pandemic levels when retail reopened in June, and 75% when pubs and restaurants reopened early July. By mid-July, cities like Birkenhead, Basildon, Burnley, and Chatham had already returned to their pre-pandemic levels of activity.
• At the other end of the spectrum, the recovery was much more sluggish in large cities. In London, for instance, footfall only picked up two percentage points when retail reopened, and after pubs and restaurants reopened, it only reached a fifth of pre-pandemic levels. In Manchester, Liverpool, and Birmingham, it was around a third.
• This is because in larger cities, the overall recovery is much more dependent on the flow of office workers who in pre-pandemic times spent their money on coffees and sandwiches, but are now working from home, while smaller places may have a smaller concentration of office workers and are more reliant on weekend trade.
• Activity picked up slightly in the last week of February, and this was mostly driven by weekend activity (rather than weekday).
• In large cities like Glasgow, London, Leeds, and Birmingham activity has barely changed, smaller cities, seaside in particular like Bournemouth, Swansea, Brighton, Plymouth and Southend have seen some of the largest rises in footfall- highlighting the role natural amenities may play in attracting people, even when shops are closed.

The Institute of Fiscal Studies have examined the careers and time use of mothers and fathers:

• The average employment and hours of work of men barely change after they become fathers, while the employment of women falls sharply from above 90% to below 75% after childbirth and, among those who remain in paid work, hours of work fall from around 40 to less than 30. Further, the wages earned per hour stagnate for working mothers, while continuing to grow uninterrupted for fathers.
• Even when women have higher wages than their male partners before childbirth, their employment falls by at least 13% during the first years of parenthood and remains at this lower level for the next decade. Their lower-wage male partners remain in paid work at much higher rates and for longer hours.
• During the first coronavirus lockdown the division of time in paid work of mothers and fathers in heterosexual couples was consistent with these gendered patterns. Among those parents who worked both before and during the lockdown, mothers who were the higher earner in the couple before the lockdown worked the same number of paid hours during the lockdown as their lower-paid male partners. In contrast, fathers who were the main earner pre-lockdown were working almost double the number of hours as their lower-paid female partners.
• The figures are even more striking for uninterrupted working time, which is likely a better measure of time in productive work when that activity is done from home while dividing the space with young children and having to care for them. No matter who was better paid before the lockdown, mothers always did less uninterrupted working time during the confinement period.
• These differences in working time were more than compensated by differences in time dedicated to domestic responsibilities, including childcare and housework. Mothers did more of these irrespective of their pre-lockdown relative pay, and they did much more if paid less than their partners.
• Lower-paid mothers did double the amount of housework and 41% more childcare than higher-paid fathers, while higher-paid mothers did 6% more housework and 22% more childcare than lower-paid fathers.

And the Enterprise Research Centre have produced a report on innovation readiness in the UK:

• The research was concerned to provide an evidence-based understanding of the factors that shape innovation across six UK foundation industry sectors (metals, paper, chemicals, glass, ceramics, and  cement).
• In the two decades up to 2016, the UK's foundation industries' share of GDP shrunk by 43%, compared with an average decline across the Organisation for Economic Cooperation and Development (OECD) of 21%. The UK now has one of the smallest foundation industry sectors relative to GDP in the OECD. 
• 56% of UK businesses across the foundation industry sectors introduced new products and 53% new processes in the last three years.
• Quarterly data from the ONS covering the period April to September 2020 show a 15.4% decline in foundation industry output compared with the same period in the previous year. This is in line with similar declines reported in manufacturing (excluding foundation industries) and the wider economy (15.6% in both cases)
• Innovation in the UK's foundation industries is constrained by a number of structural factors. These barriers are important not just because they constrain innovation directly but also indirectly because they undermine the effectiveness of more focussed policy measures. 
• They include: high entry barriers and associated very low levels of churn; under-developed management and leadership skills; dispositions and mindsets resistant to innovation; widespread reluctance to collaborate; regulatory and other pressures to achieve profound reductions in carbon emissions.

Written by

Charlie Ball

Head of higher education intelligence

Prospects