Employment: outlook for private sector improves as public sector falters

The pace of deterioration in the UK job market is finally starting to slow - but the short-term outlook reveals marked differences between the prospects for the private and public sectors.

According to the latest quarterly CIPD/KPMG Labour Market Outlook survey (reflecting the inputs of more than 900 employers from all sectors), there's now an overall negative balance of -10% between the proportion of employers who expect to employ more staff in the three months following the survey, and those expecting to employ fewer staff.  (This compares with -19% from the spring survey.)

But there's also a clear contrast between the employment prospects for the private and public sectors.  In the private sector, the negative balance is down to just -2% from -30% in the spring, whereas in the public sector it's increased from -3% to -28% over the same period - an almost exact reversal of fortunes.

CIPD chief economist John Philpott commented: "When it comes to the immediate jobs outlook, the best that can be said is that things are getting worse more slowly.  Employment will keep falling and unemployment is still on course to top three million in 2010.  And it is far too soon to rule out another avalanche of private-sector redundancies later in the year."

KPMG chief economist Andrew Smith added: "Despite the recent flurry of more upbeat economic news, many firms still lack confidence in the recovery and continue to expect tough times ahead."