ONS Publish Labour Market Trends December 2006

Labour Market Trends November 2006 was published recently by the ONS (Office for National Statistics). Summaries of relevant stories may be found below; for more information read the original in the October edition of Labour Market Trends:

News

As well as the quarterly labour market statistics update, this month there are articles on:

• Low Pay Estimates, Spring 2006;
• 2006 Annual Survey of Hours and Earnings;
• ERRATUM - Foreign Labour in the United Kingdom: Current Patterns and Trends; and

Finally... This is the final edition of about Market Trends (LMT). A new publication, Economic & Labour Market Review (ELMR), is being launched from January 2007 and will replace both LMT and Economic Trends.  The first edition of LMT was published in November 1995 when it replaced Employment Gazette. The journal has had an uninterrupted run of 134 monthly editions, culminating in this edition, which is volume 114, number 12. The start of the series goes back to May 1893 when The Labour Gazette was published as volume 1, number 1 by the Labour Department of the Board of Trade.

The LMT period from 1995 until now has seen many changes in the United Kingdom’s labour market. The number of people in employment reached its highest level since records began. However, the number of employee jobs in manufacturing fell to its lowest level (just over 3 million) since comparable records began in 1978 and the lowest on any measure since 1841. During the period that LMT has been in existence, unemployment fell from over 2.4 million in 1995 to a low of under 1.4 million in the autumn of 2004, although it has now climbed to 1.7 million.

In November 1995 the annual growth in the Consumer Prices Index stood at 2.8 per cent. Since then it reached a low of 0.5 per cent in mid-2000, but has bounced back to 2.4 per cent.

And finally, as the current Managing Editor, I would like to thank all the people, both past and present, who have both contributed to and worked on Labour Market Trends over the years, and to wish every success to the new Economic & Labour Market Review.

National Statistics Analysis in Brief

The New Urban/Rural Indicator in the Labour Force Survey

Area classifications have been in existence for some time, although the majority of these use socio-economic conditions to classify areas. An example of this is the Output Area Classification which groups together geographic areas according to key Census characteristics.

The need for a new classification was identified during a review of urban and rural definitions, which specifically highlighted the need for new definitions for rural areas which were not based on socio-economic characteristics. The work to develop a new classification for urban and rural areas was sponsored by a group of government departments and carried out by a consortium consisting of research institutes and university departments.

As a result, a new classification (the Rural and Urban Area Classification 2004) for England and Wales has been developed which uses a settlement-based approach. This means that areas are defined according to the type of settlement combined with a sparsity score based on the number of households in the surrounding areas. A separate classification has been developed for Scotland.

Key findings include:

• The Rural and Urban Area Classification 2004 was first introduced in the Labour Force Survey datasets in spring 2005 and is now included every quarter. In the three months ending June 2006 78 per cent of people aged 16 and over lived in urban areas and 22 per cent in rural areas.
• Urban areas had a younger age structure compared with rural areas. Some 45 per cent of those living in urban areas were aged 25 to 49 compared with 39 per cent in rural areas.
• The working-age employment rate was higher in rural areas, at 78 per cent, compared with 73 per cent in urban areas.

National Statistics Features

Public Sector Employment 2006: Seasonally Adjusted Series and Recent Trends

This article continues a series, providing analysis of public sector employment (PSE) statistics and an update on progress on the continuing programme for their development which ONS is conducting in partnership with other government departments.  Improvement of PSE statistics has been identified as a priority development for government for a number of policy-related purposes. Several government reviews identified the need for improvements in quality, including the Atkinson Review of Measurement of Government Output and Productivity, the Allsopp Review of Statistics for Economic Policymaking, and the
National Statistics Quality Review of Employment and Jobs Statistics, as well as the government’s 2004 spending review.

The aims of the resulting development programme are to produce a single set of accurate figures for the public sector workforce and to improve the frequency, timeliness, comparability and coverage of the statistics.

In 2005 ONS, in collaboration with other departments, implemented major improvements to PSE estimates5,6. Standard definitions for public sector employment across all departmental statistics were agreed and a single definitive set of quarterly PSE estimates introduced. A new Quarterly Public Sector Employees Survey (QPSES) was also established. ONS now publishes the official PSE estimates each quarter, as National Statistics, three months after the period to which they refer.

As well as the estimates of total public sector employment and private sector employment, breakdowns are published by government sector and by broad industry groups. All the public sector employment series are available on a headcount and full-time equivalent (FTE) basis.

Until now, estimates have been published on a non-seasonally adjusted basis and so, while publication was quarterly, comparisons over time have had to be focused on year-on-year changes. The development of seasonally adjusted series, which enable more useful analysis of quarterly movements, has therefore been a key priority.

This article introduces seasonally adjusted series and also analyses trends in these PSE series up to June (Q2) 2006. The underlying unadjusted figures used are the same as previously published by ONS in the latest quarterly First Release (on 13 September 2006). Further articles, which are planned for early 2007, will look at regional PSE estimates and characteristics of public sector employees.

Key findings include:

• Continuing improvements to public sector employment (PSE) statistics include more timely releases and the introduction of seasonally adjusted series.
• Seasonally adjusted quarterly PSE series, from 1999, are being published on both a headcount and full-time equivalent basis, with breakdowns by sector and industry.
• Public sector employment declined between 1991 and 1998 and then increased until Q2 2005. Since then it has levelled off, to stand at 5.84 million (20.2 per cent of total employment) in Q2 2006.
• Growth in public sector employment between 1998 and Q2 2005 has been concentrated in local government (mainly reflecting increases in education and police) and in the central government sector (mainly reflecting increases in the NHS). Since Q2 2005, growth in the NHS workforce has slowed down, employment in education has continued to rise while employment in other public services has declined.