Gloomy predictions for job creation and productivity


2006 could be the worst year for productivity growth since 1990, according to the Chartered Institute of Personnel and Development (CIPD).

John Philpott, chief economist at the CIPD, said that analysis of trends over the past 12 months showed that the economy will strengthen in 2006 but the year will see lower rates of job creation than in 2005.

“Employers shied away from job cuts in 2005 as the economy slowed, hoping for better economic news round the corner,” he said.

“This contributed to record levels of employment and the creation of 300,000 extra jobs by the end of the third quarter of the year, despite economic growth remaining below trend.”

Philpott said that job seekers expecting to gain from stronger growth in 2006 instead look likely to feel the pinch as employers seek to cut costs through slower recruitment, more redundancies, or efforts to raise the productivity of the existing workforce.

“In a recovering economy, large numbers of redundancies are not to be expected, although job losses are set to continue in manufacturing and may also affect sectors such as public administration – spurred by the Gershon efficiency savings,” he said.

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