The recent GDP figures included a ‘surprise’ fall in construction – the surprise being that just a few weeks before, the main private sector survey had estimated that construction was expanding faster than at any point for two years.
This post is the third in a series looking at what Jobcentre Plus vacancies can tell us about trends in the economy (previous posts are here and here). And I will argue that by looking at Jobcentre Plus vacancies we can see a clear slow-down in the construction sector in the first part of this year. The figures discussed here are national – trends will differ in different localities – and they form one small part of the statistics package that we offer to the welfare to work sector (right down to local authority level, across all the main occupation groups).
While Jobcentre Plus vacancies are far from a complete record of vacancies in construction – much job-filling still goes on by informal recruitment (knowing people and hearing about possibilities in pubs) it is likely that Jobcentre Plus vacancies represent a relatively large (and constant) share of vacancies in construction.
The figures we look at are the figures by occupation group. Our figures go through to March 2012. They also include self-employment, which is a major feature in construction. We analyse three groups of occupations – skilled trades, operatives and labourers. Our time series are based on the balance between new vacancies reported and new Jobseeker’s Allowance claims for people whose usual occupation was in these groups. We call this the ‘dynamic ratio’ and we think it gives a good indication of what’s happening in the sector – as the ratio goes down if vacancies fall, or more people sign on who would usually work in construction, or both.
Chart 1 shows the trends for skilled trades. In the recession, the ratio fell from nearly two vacancies for every new person claiming, with a usual occupation in skilled trades, right down to 0.25 vacancies per person (or to put it the other way, four new claimants for each new vacancy). This then recovered to around 0.8 vacancies per new claimant between the end of 2010 and early summer 2011, followed by a major improvement in autumn 2011, to above the balance point of new vacancies equalling new claims (which would be consistent with unemployment falling).
However since the turn of the year, there has been a definite downturn, back into negative territory.
Chart 2 shows the pattern for labourers. This is very much the same pattern as for skilled trades, with some small differences. The pre-recession picture was not as good, which may reflect labouring jobs drying up quicker than skilled jobs as the recession took hold. But the recovery in the later part of 2011 was a bit better.
Again, the ratio has fallen back since the turn of the year.
Chart 3 shows the pattern for operative builders. The overall pattern is very similar, though it appears the improvement up to autumn 2011 was somewhat better than the other groups (but I suspect that this may be owing to classification issues: the grouping of new claimants between skilled trades and operatives in the past may differ a bit from the grouping in the new vacancies figures).
Nonetheless, the trends are still recognisably similar to other trends – again with a sharp fall since the turn of the year.