Make way for the management consultants?

Yesterday's Labour Market Statistics showed the UK jobs machine going from strength to strength.  The new workforce jobs figures, which are based primarily on a business survey and measure the number of jobs in the economy, showed an increase of over a million jobs in the year from March 2013 to March 2014.  The twelve month increase - 1.082 million - is the highest since this data series started to be collected in 1978 (although, in percentage terms, workforce jobs increased at a faster rate for a brief period in 1988).

These figures are regarded as a more reliable source of data on employment by industry than the Labour Force Survey so they allow us to examine which industries are generating all these additional jobs.

The chart below breaks the growth in workforce jobs down by nineteen broad industrial categories, ranking them by the absolute change in employment.

The industries that have generated the most additional employment are primarily in the service sector although construction and agriculture also show significant jobs growth.  Note also that some industries - public administration and defence, finance and insurance, wholesale and retail and mining and quarrying - have seen the number of jobs fall.  Restructuring in financial services and public sector budget cuts mean that contraction of jobs here is no surprise but declining employment in retail - during a period when consumer spending has picked up - is counter-intuitive.

The ONS also publish data for 82 more detailed industrial categories.  The charts below show the 'top 20' and 'bottom 20' industries in terms of job change (these are for employee jobs only - which account for about three quarters of the total increase in workforce jobs - as the comparable figures for self-employed jobs appear not to be available yet on the ONS website).

Again, we see a range of service industries featuring in the top 20, comprising knowledge intensive services ('activities of head offices; management consultancy', 'education', 'advertising and market research' etc.), what we might regard as middle level services (real estate, office support, 'employment activities' (i.e. agencies) as well as personal services and hospitality ('food and beverage services', 'accommodation').  Note again, though, the presence of some construction related activities ('services to buildings and landscape activities', architecture) and agriculture.



The bottom 20 again show financial services, public administration and the retail trade all having seen slight reductions in employment.  But it also shows how the top level analysis can sometimes mask contrasting trends at a more detailed level.  Thus we find that employment in 'residential care activities' (nursing homes, hostels etc.) has fallen whereas care services delivered in client's homes and day care for children, the elderly and the disabled ('social work activities without accommodation') has increased substantially.

Even more interesting, the first chart showed that the fastest growth area was 'professional, scientific and technical activities'.  But - at the more disaggregated level - 'professional, scientific and technical activities' has seen employment fall!  This is because the latter category is - despite having the same name - only a subset of the larger category.  It consists primarily of lawyers and accountants, where employment has fallen.  Other parts of this sector have seen rapid employment increases including architecture, scientific and technical services, head office managers and consultants.  And when management consultants are hiring, we know the economy is growing!

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