Manufacturing employment in 2013

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Today's labour market statistics showed that the number of people employment rose 24,000 in the three months to April.

The fact that the labour market has remained relatively strong throughout such a prolonged period of economic weakness has been a good news story, though the flipside has been constrained growth in average earnings, and reduced productivity in some sectors.

As I reported last week, in 2012 manufacturing saw the first annual rise in employment since 1998. This was despite the fact that output in the sector fell last year. Today's figures show that manufacturing employment rose again in the first quarter of 2013.

This fits with what we've seen in our latest Manufacturing Outlook survey where the balance of companies in the sector said they had taken on new employees.

Recruitment balances improved for the second consecutive quarter, after having fallen away at the end of 2012. In this quarter's survey a balance of 11% of companies said that they had increased employment in the last three months.

This quarter we saw a new trend emerging, in that it was larger companies which were more likely to be reporting increased employment. This was a reversal of the trend we saw in 2012, where small companies were responsible for much of the overall growth.

There has been some variation between sectors, with companies in the motor vehicles sector posting the strongest positive balances, and companies in electronics and basic metals reporting that they had reduced headcounts.

Looking ahead to the next three months, a balance of 14% of manufacturers expects to increase employment.

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