Redundancy rates during pandemic have increased faster than in crisis of 2008-09

UK redundancy rates during the coronavirus pandemic have increased faster than during the 2008-09 economic downturn, according to the Office for National Statistics.

According to the ONS figures:

  • The administrative and support services industry had the highest redundancy rate between July and November last year, at 35.8 per 1,000 employees
  • Disabled employees had higher than average redundancy rates
  • Vacancies in the accommodation and food service activities industry declined the most. These were down 64%
  • Redundancies increased the most (400.4%) in the transport and storage industry in the year to November 2020

Redundancies in pandemic cf financial crisis. Graph: ONS

Redundancies during the pandemic compared to the financial crisis. Graph: ONS

The employment rate decreased by 1.1 percentage points between January to March and September to November last year to 75.2%.

The ONS said this showed that the rate of redundancies recorded since the beginning of the pandemic had already exceeded the highest rate reached during the financial crisis of 2008-09.

Between March and September last year, monthly notices of expected large redundancies (20 or more employees at a single establishment) increased from 435 in March 2020 to 1,734 in September.

Meanwhile, a closely-watched survey showed that the UK economy continued to decline in the first two weeks of February, although the speed of the fall has slowed since January.

The IHS Markit/CIPS Flash UK Composite PMI report came in at 49.8, with anything below 50 seen as a contraction.

This was an improvement on January’s figure of 41.2.

Manufacturers reported severe supply chain disruptions due to international shipping delays, strong worldwide demand for raw materials, and Brexit-related trade problems.

But manufacturing still grew, recording a flash PMI of 54.1 as new orders increased.

The services sector continued to struggle with COVID-19 lockdowns and restrictions, recording a PMI of 49.7 compared with 39.5 in January.