There has been some talk recently of an improvement in labour market conditions. This narrative has support from patterns such as this from the Quarterly National Household Survey.
In the year to Q2 2013 employment is up around 33,000 and speculation of a turn in the labour market is not outlandish. There have, however, been concerns raised about this improvement because of a caveat the CSO put with the figures in relation to the Agriculture, Forestry and Fisheries sector. The last few QNHS releases from the CSO have said:
In the case of the Agriculture, forestry and fishing sector it can be noted that estimates of employment in this sector have shown to be sensitive to sample changes over time. Given the continued introduction of the sample based on the 2011 Census of Population as outlined in the note on the front page of this release, particular caution is warranted in the interpretation of the trend in this sector at this time.
This is the trend.
Employment in this sector is recorded as being up around 16,000 in the year, equivalent to half the overall increase. So is the increases in employment merely the reflection of a measurement issue in the CSO data? No.
The CSO note tells us that caution is only warranted for the “trend in this sector”; they do not suggest such caution carries through to the overall figures. This is a result of a way the figures are compiled. The sectoral data from Agriculture and other areas do not contribute to the calculation of the total employment figure – they are a distribution of it.
The CSO determine the total number employed and then divide that across the different NACE categories. The number of employees allocated to the Agriculture sector is under question at the moment, the figure provided for the total number of employees is not. But the 33,000 increase in employment does warrant further scrutiny.
The breakdown between full-time and part-time employment is important. Here are the seasonally adjusted full-time figures.
Full-time employment is up about 22,000 on the year so accounts for around two-thirds of the increase. By definition, part-time employment provided the remaining increase in employment.
Apart from the 12,000 increase in part-time employment in the past year, the other noticeable thing is that part-time employment shows a consistent upward trend since 2008, even as full-time employment was falling rapidly. One concern with part-time employment is that it may include people who would prefer to be in full-time employment and there are “under-employed”.
The CSO provide data on such a measure although only back to Q3 2008 and also not on a seasonally adjusted basis.
This has also been steadily increasing, though over the past 12 month is actually down around 7,000.
One big issue with looking at changes in the number of people in employment is that it might fully reflect changes in the amount of employment people are actually engaged in. Existing employees could be getting more (or less) hours which reflects a change in labour market conditions not reflected in the numbers employed data looked at above.
To little reaction the CSO have put together a complementary data from the QNHS that provides labour market data in full-time equivalents. In the CSO’s own words:
The FTE employment measure for a respondent is the total actual hours worked by the respondent, divided by the average number of hours worked by respondents working in similar (gender, industry sector and employment status) full-time jobs. While changes in the number of persons employed will typically be the primary driver of changes in FTE employment, it will also be affected by other factors. These include increases or decreases in the proportion of total employment accounted for by part-time employment, the number of hours worked by people in employment and other changes.
FTEs give a measure of the amount of work as opposed to the number working.
The amount of work has increased and there are around 30,000 more FTEs in employment now than a year ago, though all of that increase is down to the jump in the last quarter for which data are available, Q2 2013.
Using the new FTE data we can compare the reduction in the numbers employed since the peak to the reduction in the amount of work (the FTEs).
It is clear that the loss of work has been greater than the reduction in the numbers employed. There are people in jobs but they are working less than their equivalents did before. This reflects the increase in part-time employment. Numbers employed are down 14% from the peak in 2007, while FTEs are down 17% over the same time.
As outlined earlier both measures have turned positive in the most recent data but it will take something similar over subsequent releases before we can see that a trend has become embedded.
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