North East-South East Divide In Labour Market

The employment rate was highest in the South East with 75.1% and lowest in the North East with 66.1%. The unemployment rate was highest in the North East with 10.4% and lowest in the South East with 5.8%. Inactivity was highest in the North East with a rate of 26% and lowest in the South East with 19.7%. The claimant count was highest in the North East at 7.1% and lowest in the South East at 2.7%.

Nationally, the unemployment rate was 7.8% down 0.2% from December 2012 to February 2013 and 0.3% on a year earlier. There were 2.51m people unemployed, a fall of 57,000 from December 2012 to February 2013 and 72,000 on the year. Inactivity was up 0.2% to 22.5%. The number of young unemployed fell 20,000 to 959,000.

Total pay rose by 1.7% to £476/week and regular pay by 1% to £446/week compared with March to May 2012. Average weekly hours worked for March to May totalled 32 up 0.1 from December to February and a year earlier. The claimant count was 1.48m, down 117,700 on the year. The rate was 4.4% down 0.1% from May 2013.

There were 32.3m workforce jobs in March 2013, up 211,000 from December and 161,000 on the year. The biggest increase sectorally was in professional, scientific and technical jobs with an increase of 118,000 to 2.56m. There were 529,000 vacancies, up 24,000 from January to March and 56,000 on the year.

Business Start-Ups Up In 2011

The number of business start-ups increased by 11.2% between 2010 and 2011 according to a recent statistical bulletin on business demography from the ONS. The increase of 26,000 brought the total number of business births to 261,000. The number of businesses that ceased trading fell by 20,000 to 230,000 or 7.9% during the same period.

Regionally, the highest number of start-ups was seen in London with a start-up rate of 14.6% or 61,000. The North East with 11.2% and the North West with 11.1% also figured among the regions at the top of the table. The highest rate for businesses ceasing to trade was in the North West with 10.7% or 25,000, then London with 10.4%.

The information and communication category saw the highest rate of increase in start-ups with an increase of 14.8% followed by professional, scientific and technical with 14.3% and business administration and support services with 14.1%. Business administration and support services also saw the biggest numbers cease trading with a rate of 11.9% follwed by finance and insurance at 11.5%. The highest numbers were in professional, scientific and technical with 39,000, construction at 35,000 and business administration and support services with 25,000.

The UK 5-year survival rate for businesses starting in 2006 to 2011 was 45%. The highest 5-year survival rate was seen in N.Ireland with 50.5%, the lowest was in London with 41.8%. The industry group with the highest survival rate was health with 60% and education with 52.8%. Hotels and catering was lowest with 35.7% lasting 5 years.

Service Sector Increases Growth

The index of services published by the ONS shows that the services sector grew by 2.4% in December 2011 compared with December 2010. All components of the service sector index reported growth. The biggest contributors to the increase were business services and finance which grew by 2.9% and government and other services which grew by 2.3%. The sector also increased on the monthly comparison by 0.2%.

The main contributors of the five components of the business services and finance section were other professional services and real estate. All five components showed an increase. Output increased in five of the six components of the government and other services category with human health and social work activities providing the main contribution with an increase of 3.1%

The public strike on the 30 November probably has an effect on the index but it is difficult to measure the effect directly.

Decrease In Trade Union Membership In 2010

Trade union membership fell slightly in 2010 compared with 2009. Membership density fell 0.8% to 26.6% and membership fell by 179,000 or 2.7% to 6.5m. During this time employment actually increased by almost 0.5% between 2009 and 2010. Density in the private sector fell by 0.9% and by 0.3% in the public sector acording to statistics from the Labout Force Survey and published by the Department for Business, Innovation and Skills and the ONS.

The professional occupations reported the largest percentage of union density with 43.7%. Sales occupations were lowest with 12.9%. Females are now more likely to be union members than males whether by age, public sector, workplace size, job or other individual characteristics.

Geographically, density rose in Scotland by 0.5% to 32.3% but the other nations recorded falls of 0.9% in England and Wales and 4.2% in N.Ireland. The trend over the last 10 years shows that trade union density has fallen by about 3% in England, Scotland and N.Ireland and by about 5% in Wales. The North East recorded the largest fall in trade union density of 7.4% over the last 10 years. The East of England recorded the smallest fall of 1%. The last 10 years has also seen an increase in union density in the professional and administrative services, wholesale, retail trade and motor repair sectors but fell in the other sectors. Water supply, electricity and gas recorded the biggest falls of over 15% each.

Trade union presence reached 46.1% in 2010, a fall of 0.5% on 2009 and 2.8% over the last 10 years (2010). Collective agreements affected the pay and conditions of over 30% of employees from 36.4% in 2000. They covered 16.8% of private sector employees and 64.5% of public sector employees. The public sector accounted for 62.4% of union members, professional, associated professional and technical occupations accounted for 45.5% of all trade union members.

Business Services Still Under Pressure

Volumes of business in the service sector rose in the most recent quarter according to the CBI services survey, but while consumer services improved slightly, business services did not.

The value and volume of consumer services increased over the last three months with the survey balance up 10% the highest since August 2007. Profitability did not change much but with costs rising only 2%, the best figures since November 2007. Sales prices increased and are expected to rise again during the next quarter.

In business and professional services it was slightly different. Although value and volume of business was little changed, according to the survey, prices and profitability fell, giving a negative balance.

The survey also reported that both consumer and business services were cutting back on staff. It also reported that on the whole both sectors were more optimistic about the business situation than the last quarter and plans to expand were more numerous in consumer services than business services. A factor affecting service sector businesses expansion decisions was concern about the strength of demand and their ability to raise funds was considered a barrier to growth.

Lower Quarterly Profits In The Service Sector

The service sector saw lower profits in the quarter due to an unexpected sales dip that kept business levels at well below normal according to the latest CBI Service Sector survey.

Business and professional services measures fell when they had been expected to strengthen further. profits fell for the sixth quarter in a row. Consumer services volume and value fell sharply and by more than expected causing a dip in profits.

Both the business and professional sector and the consumer services sector put the falls down to lack of demand or sales which they say is also the biggest constraint on future growth. Fund raising was also cited as a key concern.

Normal Services May Soon Be Resumed

The most recent CBI Services Sector Survey suggests that service sector businesses are still running at below normal levels but less than in the previous quarter. Pressure on profits and deflation are not helping.

Business and professional services' volumes and values both increased slightly for the first time since May 2008 and many firms expect it to continue to increase over the next three months. However they remain below normal for the seventh consecutive quarter. Profitability suffered because of lower prices, which are expected to fall further over the next three months as competition for business continues, but may increase slightly over the coming quarter. Employment also fell again for the fifth successive quarter but less steeply than earlier in the year. Business and professional services are more optimistic than they have been for a long time.

Consumer services values and volumes fell slightly but at much slower rates than the previous three quarters. Over the next three months firms expect values to stabilise and volumes to decline. Optimism is not as strong as three months ago. Profitability in consumer services also suffered from lower prices which are also expected to continue to fall over the next quarter. Employment in consumer services was stable.

Service sector activity was less weak than in recent quarters and things may be beginning to look a bit better.

ONS And CBI See Fall In Business Services Output

Services output seasonally adjusted chained volume of gross value added index fell by 1.2% quarter-on-quarter to 113.3 and follows a fall of 1.3% on the previous three months according to Office for National Statistics latest Index of Services figures. The most significant fall in both quarter-on-quarter and in month-on-month figures was in business services and finance. Distribution fell 0.2% in the quarter to March compared to the quarter to December. It is the 9th consecutive monthly fall, driven mainly by wholesale, motor trades also decreased and retail increased. Hotels and restaurants fell by 5.1% over same period. There were also significant decreases in bars and restaurants. Transport, storage and communications fell by 2.3%. Business services and finance fell 2.2% to 121.7 in the quarter to March on the quarter to December and fell 0.4% between February and March. Government services increased by 0.7% in the quarter to March with the most significant increases in health and social work.

The Confederation of British Industry released its quarterly Services Sector Survey results today. It shows the service sector is still is deep recession. There are some signs of confidence returning. Consumer services fell at their fastest rate since November 2001. The rise in prices made the fall in business values look less marked. Business and professional services values fell faster than volumes due to record deflation in prices. Rates of decline are expected to slow down in both consumer services and business and professional services over the next three months. Employment is continuing to fall in both sectors. Profitability also fell but at a slower rate than the record falls of the previous quarter. Business and professional services show a similar pattern. A steep downward trend continues in telecomms and computing and transport of goods and post. Marketing services also show a continued downward trend in business values and volumes but much less marked. Confidence and profitability have both fallen. There are some signs that the decline is begining to slow.