The Enterprise Research Centre has indicated that the recent surge in employment may not only be a fluke, but an early warning sign of an approaching recession.
The Enterprise Research Centre, a research network focusing on research into business and industry, has released a research paper on the proportions of jobs being created and destroyed over the past year in the United Kingdom, using data collected from the Office of National Statistics.
The research paper compared job market data between 1998 and 2018 from the Office of National Statistic’s Business Structure Database.
Overall, last year saw 4.9 million jobs either created or destroyed in the economy, in what was described by the Group as a “jobs churn” in the private sector. This is equivalent to 23% of all private sector employees either being fired or hired in 2018 alone.
Established companies that had been set up and operating since before 2018 had created 1.65 million jobs in 2018, however this was vastly outweighed by an overall loss in jobs of 2.25 million, which is the highest number of jobs destroyed since 2010, at the height of the last recession. This led to a net loss of around 613,000 jobs from existing businesses in the private sector.
Around 1 million new jobs were created by start-ups, or companies that had just been set up and had began operations in 2018. This led to a net positive figure of employment in the jobs market of around 400,000 in 2018, a figure that was widely endorsed as a large success by the Conservative Government when the data was published earlier this year.
However, the total number of jobs lost last year was 17% higher than previous years.
The rate of births in the country has also slowed, and the number of deaths has steadily risen since 2016. This has led to many English regions, such as Yorkshire and parts of the East of England, to see the number of deaths exceed the number of births in 2018, leading to a decline in the total population. The death rate in the UK has not exceeded birth rates since the recession period between 2008 and 2012, where the number of deaths rose to a height of almost 5% above the birth rate for the United Kingdom.
Following a net high in the private sector job creation over recent years, despite a seemingly positive sign of an increasing number of the population being in employment, 2018 has seen a drastic change in the composition of the jobs market, seemingly indicative of the jobs climate in pre-recession Britain, with a similar pattern seen in 2005, 2006 and 2007 under ONS data. This could possibly indicate that the UK is heading towards a period of unsustainable growth followed by a sharp decline in the economic stability of the country.