UK labour demand is weakening rapidly, as evidenced by data released yesterday showing a 26% slump in the stock of job vacancies between March and December 2008.
The recent pace of decline is faster than during the recession of the early 1990s but less rapid than over 1974-76 and 1979-81 – see chart. In other words, while confirming a serious employment recession, vacancies have yet to indicate a downturn on the scale of the mid 1970s or early 1980s.
In the three prior recessions, the stock of vacancies reached a trough 18-24 months after peaking having fallen between 52% and 69%. This suggests a further decline of 35-58% from the December level, with a bottom between September 2009 and March 2010.
