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Jobs market 'set to get worse'

The jobs market is facing a "slow, painful contraction", with firms scaling back decisions on whether to recruit more staff against a background of global economic "turmoil", a new report has warned.

The Chartered Institute of Personnel and Development (CIPD) predicted that the employment situation will get worse for the rest of the year, while medium-term prospects were no better.

Fewer firms were planning to offshore jobs abroad and recruit overseas workers, while the private sector will grow at a slower pace in the next three months, it was suggested.

Confidence in the public sector remains low for the next three months and will get worse next year, said the CIPD after surveying 1,000 employers.

Gerwyn Davies, public policy adviser at the CIPD, said: "The figures point to a slow, painful contraction in the jobs market.

"Many firms appear to be locked in wait-and-see mode, with some companies scaling back on all employment decisions against a backdrop of increasing uncertainty as a result of the eurozone crisis and wider global economic turmoil.

"The good news resulting from this lull in business activity is that fewer employers are looking to relocate abroad or make redundancies.

"The downside is that recruitment intentions are falling, which will make further rises in unemployment therefore seem inevitable given that public sector job losses are outpacing the predictions made by the Office for Budget Responsibility.

"There is no immediate sign of UK labour market conditions improving in the short or medium term."

The report was published ahead of new unemployment figures on Wednesday which will show whether the youth jobless total has gone over a million.

A DWP spokesman said: "We always said that the road to recovery would be tough - there is a long way to go before we deal with all the economic challenges ahead particularly given the crisis in the Eurozone.

"There are jobs out there, with Jobcentre Plus taking on 10,000 vacancies every working day.

"Our new Work Programme is now up and running and will make a big difference in ensuring that people on out-of-work benefits get the right support to get into employment."

Unison's general secretary Dave Prentis said: "The CIPD's survey shows that the future looks bleak for both the private and public sector unless the Government takes urgent action.

"The Government cannot bank on the private sector to pick up the pieces of the huge number of public sector job losses - employers are confirming this. As unemployment and inflation figures look set to soar further, the chances of economic growth get slimmer by the second.

"The public sector job losses are far outpacing the Office for Budget Responsibility's predicted figures. These cuts not only ruin the lives of the families of those made redundant, but also pile pressure on to those who continue to work in and rely on these vital services, who are mostly low-paid women.

"Millions of young people, public sector workers and long-term unemployed are among those paying the biggest price for an economic crisis they did not cause. A crisis that the Government will continue to fail to recover from unless it puts a stop to public sector job losses and concentrates on kick-starting the economy."

Shadow work and pensions secretary Liam Byrne said: "Unemployment started rising again well before the current eurozone crisis.

"The Government's economic policies - spending cuts and tax rises that go too far, too fast - have choked off growth and led to record levels of unemployment, with youth unemployment soaring.

"The evidence for a change of course is piling up. Labour has shown there is a better way with a five-point plan for jobs and growth that would get our economy moving again so we can get the deficit down."

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