Construction Boom Splits the North-South Jobs Market Wide Open

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The North-South divide in the job market has widened dramatically as a construction boom in the South boosts jobs vacancies, according to the latest UK Job Market Report from Adzuna.co.uk.

Based on the number of jobseekers per vacancy, in October nine of the best ten cities to find a job were in the South of England, while nine of the worst ten cities were in the North. In October, it was 100 times more difficult to get a job in Salford, where there were 28 jobseekers per vacancy, than in Cambridge, where there were just 0.28 jobseekers per vacancy.

Overall the UK jobs market improved in October, with a marked increase in the number of advertised vacancies. There were 748,923 vacancies in total, a 9.2% increase from the previous year, and a 5.3% increase compared to September – the biggest monthly increase in over a year.

The growth in vacancies has been helped a dramatic increase in the trade and construction sector. The number of advertised construction vacancies has increased by almost a third (31%) compared to just six months ago. Construction accounts for over 6.3% of the UK’s economic output and its growth is reflective of a sustained economic pick-up.

But the construction boom has also widened the North-South divide, with many of the largest infrastructure projects – including Crossrail, which will require 14,000 workers at the peak of construction[1], and the improvement of London’s Northern Line – creating jobs in the South of England. In London, the number of construction vacancies was 95% higher year-on-year in October, whilst in the South East, advertised vacancies increased by 89%.

The boom in construction jobs is also driven by a surge in homebuilding, with growing demand for houses filtering through to the jobs market. New housing now accounts for 19.4% of total construction output, 5.1% higher than the lowest point in Q3 2009.[2] But while the demand for new housing is strongest in the South and South East, where property prices are highest, the majority of this work is likely to be focussed in these regions.

Andrew Hunter, co-founder of Adzuna, explains: “The booming construction sector has driven a wedge in the national job market, and split the North-South divide wide open. Construction has been kick-started by a major infrastructure overhaul in the South, with vacancies focussed mainly in these regions. This stark divide is set to widen further when projects such as the Thames Tideway begin in the South.”

Of the 55,663 construction vacancies advertised in October, almost half fell in London (30%) and the South East (a further 18%). By contrast, only 6% of advertised vacancies were in the North West, and just 3% were in the North East.

Regional Breakdown in Construction Vacancies

Region

% of Construction Vacancies in October

London

30.1%

South-East England

18.5%

Eastern England

8.5%

South-West England

8.2%

West Midlands

7.4%

East Midlands

7.3%

North-West England

6.2%

Yorkshire and the Humber

4.9%

Scotland

4.0%

North-East England

3.0%

Wales

1.6%

Northern Ireland

0.4%

Despite widespread optimism, wages are still flat

But while the number of vacancies is booming, wages have yet to respond to rising demand. Average advertised salaries in October fell 2.2% from September to just £33,245. This is 1.3% lower than last October, meaning that the average British worker is £1,179 worse off in real terms this winter.

Andrew Hunter, co-founder of Adzuna, explains: “The jobs market is thriving with new opportunities for jobseekers, and vacancies have hit a new record high. But inflation is still leaving many out of pocket. In real terms, wages have fallen £1,179 since last year, which is cutting into the Christmas budgets for many. Wages are still recovering from the economic downturn, and are slipping further behind the cost of living, as employers keep a cap on advertised salaries.

Table 1

 

September 2013

October 2013

Month Change

12-month change

UK Vacancies

710,859

748,923

+5.3%

+9.2%

Jobseekers per Vacancy

1.9

1.7

-10.5%

-26.1%

Av. Advertised UK Salary

£34,005

£33,245

-2.2%

-1.3%  

Where are all the jobs?

Nine of the best cities to find a job were in the South. Aberdeen was the only city outside the South of England to have more than 1 job available per jobseeker.  An important centre for the oil and energy industry in Europe, it was the only northern city to rank in the top ten.

Cambridge was again named the easiest city in the UK to find a job, with more than three times the number of jobs than jobseekers.

By comparison, four of the worst cities in the UK to find a job – Salford, Wirral, Sunderland and Hull – all have more than 20 jobseekers per vacancy. Birmingham is now the tenth worst city to find a job, but prospects could increase if HS2 is created, as this would form an important link between the South and the Midlands.

Andrew Hunter comments: “The North-South divide has never been so significant. Large construction projects are driving local labour markets down South, while many of the traditionally public sector-reliant Northern towns are being left in the dust. Aberdeen is something of a satellite city, with the construction sector bolstered by a thriving energy industry, which demands both engineers and infrastructure.

“Mirroring the improvements we have seen in construction, the IT & Technology, and scientific sectors have also been racing to recovery. Cambridge, the best city in the UK to find a job, is a perfect storm, being a hub for all three industries. As a result, there are over three vacancies for each jobseeker to choose from.”

In terms of salaries, the most promising signs of a salary recovery can be found in Wales and Scotland, with wages in these areas both up year-on-year in October. But the rest of the UK is lagging behind, with negative wage growth recorded in the remaining ten UK regions.

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[1] Crossrail Careers website, October 2013

[2] ONS, Output in the Construction Industry, October 2013

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