Conservative/LibDem Govt Holds Little Hope For Unemployment Lift

Last Updated May 12, 2010 6:31 AM EDT

As the Conservatives and Liberal Democrat parties form a new government for the UK, the latest unemployment figures illustrate what a difficult task in rebuilding the country's economy lies ahead of them.

According to figures from the ONS, unemployment stands at 8 per cent, or about 2.51 million people â€"- a rise of 53,000 in the three months to March.

Hardest hit by unemployment are men and young people, with the number of jobless in the latter group rising by 18,000 in the same period, to just under 1 million 16-24 year-olds out of work.

In a statement, CIPD chief economic adviser, Dr John Philpott summed up the vulnerable nature of business confidence in future employment prospects: "Employers are looking for a lasting political settlement and, in particular, clarity on the shape of economic and employment policy that will help inform decisions about staffing levels. Without this, hopes for any marked improvement in job prospects later this year will be dashed."

Signs are that any gains in private sector employment will be more than offset by massive cuts in the public sector that will inevitably lead to job losses on a large scale.

Recent announcements of job gains have been centred around the retail sector, with Tesco promising 9,000 more jobs as it expands its store-base.

Similarly, McDonalds in the UK intends to grow it's staff by 5,000 people, with the opening of 10 to 15 more outlets.

These companies have both benefited from consumers downscaling their spending behaviour, but they are both dependent on shopper confidence that comes with a steady job.

Other employment gains have been in the manufacturing sector. Landrover expects to create 275 manufacturing jobs in the West Midlands, while construction vehicles manufacturer Caterpiller committed to 300 factory floor jobs in Leicestershire.

These traditional industry organisations are joined by vacuum cleaner maker Dyson, which is expanding its workforce by 350 engineers.

Manufacturing has benefitted from the weak pound, stimulating overseas sales. This market is very much dependent on the world economy, but domestically, the last Tory regime was hardly manufacturing's friend. It will be interesting to see how the party's attitudes have changed.

Another industry that appears to be enjoying growth is pharmaceuticals, with GlaxoSmitKline which has pledged to create 1,000 UK jobs, in response to promised tax cuts on revenues from patents.

Workers there will no doubt be hoping that particular move by the outgoing Labour administration will remain in the expected emergency budget.