Unemployment forecast to keep rising – CBI

Unemployment will continue to rise throughout 2011 and will only edge lower in 2012, according to analysis by the CBI.

Unemployment will continue to rise throughout 2011 and will only edge lower in 2012, according to analysis by the CBI.

It says that it expects unemployment to rise from 2.46 million to around 2.6 million during 2011 and it warns of deep-seated structural problems which will not be solved by a return to economic growth alone.

The report, Mapping the route to growth: rebalancing employment, marks the start of a major new project for the CBI which it says will explore what is needed to get the UK working.

By mapping the state of the labour market region-by-region, the CBI says that the decade of growth before the recession masked entrenched problems, including pockets of long-term unemployment and inactivity, high public sector dependency and serious skills shortages.

Projections of future employment trends, says the CBI, suggest these labour market divisions will deepen as the recovery continues, with highly-skilled jobs expected to be most in demand in London and the South East, compared with the North East and West Midlands.

John Cridland, CBI Director-General, said:“The Government has rightly focused on tackling the structural deficit in the public finances, but needs to apply the same rigour to attacking the structural jobs deficit.

“The boom years before the recession masked the extent of deep-rooted problems in parts of the labour market, including long-term unemployment and an unhealthy dependency on the public sector. These problems will not disappear with the economic recovery and left unchecked will have grave social and economic consequences.

“Only private sector growth can create the jobs we need and we must ensure the fruits of recovery are felt in every region. We need to get the UK working and that is going to require fresh thinking and innovative solutions.”

The report sets out the complexity of the unemployment problem, which is linked to many factors including skills, local economic performance, welfare dependency, educational achievement and infrastructure.

However, the cyclical rise and fall in employment has hidden a deep-rooted problem of long-term unemployment and economic inactivity.

Cridland added: “Our analysis shows that problems in the labour market do not follow a simple North-South divide, but are far more complex.

“The answer is not bussing people to where the jobs are. We need to tackle the structural causes of unemployment, while doing all we can to get the private sector really motoring in all regions of the UK.

“In the coming months the CBI will be working with a broad range of businesses and other stakeholders to come up with practical solutions to help get all of the UK working.”

The CBI’s maps can be viewed at: http://employment.cbi.org.uk/projects/getting-the-uk-working/interactive-maps.

Among the report’s key findings are a forecast that the UK will see an acceleration of the shift towards higher-level occupations. By 2017, says the report, 56% more jobs will require people to hold graduate-level qualifications, while demand for people with no qualifications will fall by 12%.

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