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Stubbornly high numbers 'excluded'

Young still facing challenges finding work

Mark HarveyYouth unemployment has fallen from the peak of 40% during the recession to just above 14%, though there are wide disparities in cities across the UK.

This could impact on hopes of achieving “inclusive” growth, according to a report by EY in association with the EY Foundation.

The report indicates that overall youth unemployment in Scotland in 2015 was 14.3%, compared to the UK average of 14.4%, but Scotland’s cities show more stability than their counterparts south of the border. 

The difference in youth unemployment rates across Scotland was 11.5 percentage points, ranging from the lowest recorded 7.9% in the Highlands to the highest recorded 19.4% in Dundee. 

In contrast, figures from England and Wales diverged by up to 19.1 percentage points, with Coventry demonstrating the lowest youth unemployment rate of 8.2%  compared to 27.3% recorded by both Middlesbrough and Swansea.

The 2015 data highlights Dundee as the Scottish city with the highest level of youth unemployment at 19.4%. Falkirk, which had the lowest youth unemployment ten years ago, moved up to second highest at 18.7%, followed by Glasgow at 16.6%. 

Mark Harvey (pictured), EY senior partner for Scotland and EY Foundation board trustee, said: “Youth unemployment is a major issue for the Scottish and UK economies, which could be exacerbated by a period of weaker economic growth in these uncertain times ahead.

“As such it has never been more important to create and foster the right conditions for young people to flourish in work, regardless of their background or circumstances.

“Corporates should be innovative in order to attract talented young people to their ranks. Business leaders could also help young people gain access into the workplace by providing them with vital skills, experience and opportunities necessary to secure work in the 21st Century.

“It is vital we have a coordinated response from business, government and third sector in order to close the skills gap, secure the future prospects of our young people as well as economic prosperity and growth.”

Mark Gregory, EY’s chief economist, says: “Youth unemployment rates have fallen from the peaks we saw during the recession, when 40% of the UK’s 16-17 year olds were facing unemployment.

“However, a stubbornly high number of young people remain excluded from the labour market and history has shown us that young people are more exposed to economic volatility and industry restructuring than the population as a whole.”

The report forecasts that between 2015 and 2030 the UK’s employment in distribution, hotels and restaurants will grow by an average of 0.4% a year, matching the forecast growth of the UK’s total employment. Over the same period, it forecasts employment growth in other services by 0.9%, strongly outpacing the average across UK sectors.

Employment opportunities will be fewer in mining & utilities and manufacturing. Both sectors are expected to see a fall in employment levels and already employ fewer than average young people (9% for mining & utilities and 9.6% for manufacturing, compared to all sectors 12.8%).

Maryanne Matthews, chief executive of the EY Foundation, an independent UK charity set up to help young people find work, says: “Maturing workforces, demands for new skills in a knowledge economy, and a projected growth in the number of high-skilled jobs over the next few years, means that the need for employers to diversify talent has become a business imperative.”

GROWTH SOFTENS IN SERVICE SECTOR AS OPTIMISM FALLS – CBI

The pace of business volumes growth in the business and professional service sector slowed, and remained stable in consumer services, in the three months to August. But optimism fell sharply, according to the CBI’s latest quarterly Service Sector Survey.

Business and professional services firms – which include accountancy, legal and marketing firms – reported that business volumes were unchanged on the quarter, after rising in May. Meanwhile, consumer services companies – which include hotels, bars, restaurants, travel, leisure – saw further moderate growth in business volumes.

In the first quarterly Service Sector Survey since the UK’s decision to leave the European Union, optimism in both sub-sectors fell sharply. In business and professional services, it fell at the fastest pace in nearly five years (since November 2011), whilst in consumer services, it dropped at its fastest since the financial crisis (February 2009). Business expansion plans in business and professional services were the weakest since May 2012.

Employment growth in both sub-sectors remained above average, and was at the strongest level this year in consumer services, but is expected to slow over the next quarter. Growth in spending on training and retraining also remained resilient.

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