In June we reported on the GLA seminar on the possible effects of the credit crunch. Back then experts agreed that it was not a ‘blip’ but they could not agree on the severity of the downturn. Recently both Mervyn King, the Governor of the Bank of England and Gordon Brown, the Prime Minister have used the ‘R-word’. So there seems to be an agreement that it will be a recession, rather than a less severe downturn.
Back in June, the two sectors, all the experts agreed would be affected, in terms of jobs lost, were the financial services sector and construction. These predictions seem to have been accurate with manufacturing being added to the sectors already badly hit. Now many are predicting that service sector jobs, such as those in retailing and hospitality will also be affected, with unemployment eventually hitting three million.
So far it has been hard to spot the impact on jobs for young people in Central London. Overall opportunities notified to boroughs in the Central London Connexions area went up from 898 in the first two quarters of 2007-08 to 1,274 in the same period of 2008-09.
On the surface it might seem that Connexions vacancies are immune from recession. However, looking at a snapshot of live vacancies on 20th October only 36 of 492 opportunities were in business services and only 21 in finance, usually two of the bigger employment sectors. Construction was not a big employer of Central London young people before the downturn, so it was not surprising to find only 21 opportunities. In addition, what construction vacancies there were demanded either good educational qualifications or on-site experience. Manufacturing may be a very small sector in Central London but three-day weeks in industries such as motor vehicle manufacturing could well reduce opportunities such as car sales and maintenance.
Over half of the live vacancies on 20th October were in retail and hospitality. Recruitment for the Westfield Shopping Centre in White City, which opened on 30th October has been a major factor in boosting opportunities since April. Similar (but smaller) shopping centres have been opening in other parts of the country defying the credit crunch. However, even without the ‘Westfield effect’ retail opportunities seem to be holding up well so far and the same is true of hairdressing (45 opportunities on 20th October).
Of course retail and hospitality will also feel the pinch. The overall trend is for consumers to be more cost conscious – while Marks & Spencers and Waitrose struggle Lidl and McDonalds are doing well and business for Pawnbrokers is booming.
Looking ahead to next year, far-sighted employers will continue training schemes, but some might reduce numbers and opportunities for school and college leavers are likely to be more competitive.