A surge in private sector job creation will “more than offset” public sector job cuts in the final quarter of 2010, according to a report by the Chartered Institute of Personnel and Development (CIPD).
The Labour Market Outlook, by the CIPD and accounting firm KPMG, found that while more than four in 10 public sector organisations are already making redundancies, demand for labour in the private sector has risen.
Overall, the survey found a positive difference between the proportion of employers cutting jobs and those intending to hire more staff.
This will come as good news to the Government, which has previously been criticised for significantly understating the impact of its Comprehensive Spending Review on public sector jobs and expecting private companies to make up the difference.
Earlier this month, the CIPD estimated that an extra 1.6 million private sector jobs would be needed by 2015-16 to offset the cuts.
The Labour Market Outlook compared the net balance of private and public sector employers, measuring the difference between the proportion of employers that intend to increase total staffing levels and those that plan to cut the total workforce. It found that the private sector had a balance of +39 and the public sector had a balance of -44.
This gap has widened significantly since last year’s survey, in which the private sector had a figure of +19 and public sector organisations -35.
Dr John Philpott, chief economic adviser at the CIPD, said: “Signs of not only sustained but also increasing buoyancy in private sector job prospects is encouraging, especially since some other forward-looking economic and labour market indicators have been subdued of late.
“What remains to be seen is how much of this good news is merely a pre-festive-season surge in private sector jobs or a sustained improvement that will continue to offset large scale public sector cuts.”
For more information about the impact of the Government’s Comprehensive Spending Review on jobs, listen to the XpertHR podcast, featuring an interview with John Philpott about the CIPD’s unemployment forecasts earlier this month.