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PwC: Business services could create 1.5m more jobs by 2025

Mar 11
 
Tags: PwC, UK: London
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The business services market could deliver 1.5 million extra jobs by 2025, according to new forecasts from PricewaterhouseCoopers (PwC).

In its latest UK Economic Outlook Report, the firm said the services sector as a whole is set to drive employment growth over the next decade.

Three million additional jobs could become available by 2025, bringing the total number of working roles in the UK to almost 37 million.

Education and health is expected to add over one million positions, which would make it the biggest of the services sectors.

Manufacturing is among the markets set to see job losses, with factors such as automated technologies and stiff overseas competition likely to bring the total number of jobs in the industry down by 600,000, to around two million.

About 150,000 positions could disappear in public administration, defence and social security as austerity measures continue to take their toll.

However, looking at the British labour market as a whole, these reductions will be more than offset by growth in private sector services jobs.

John Hawksworth, chief economist at PwC, said the UK has been a "powerful job-creating machine" in recent years.

He added: "The dominant story of the last century has been the rise of services to its current position as the source of over 80 per cent of total UK employment.

"Health and education and business services have been the biggest growth areas for jobs since the late 1970s and we see a further 2.5 million jobs being added in these sectors by 2025 as demand continues to rise relatively fast for these services."

What are the threats to the labour market?

In its Report on Jobs for February, the Recruitment and Employment Confederation (REC) acknowledged the positive trends in the labour market, with permanent hiring on the rise and pay also moving in the right direction.

However, the recruitment industry body warned that "serious threats are looming just around the corner".

One of the biggest dangers is the ongoing shortage of the skills that employers need, particularly in sectors like IT and engineering.

Kevin Green, chief executive of the REC, highlighted other potentially disruptive developments such as the introduction of the national living wage on April 1st and the EU membership referendum in June.

Speaking ahead of the chancellor's next Budget on March 16th, Mr Green said: "Now is not the time to put up additional hurdles that could throw the jobs-rich recovery off course."

PwC also referred to the Budget in its UK Economic Outlook Report, predicting further fiscal tightening measures as the government seeks to eliminate the budget deficit before the end of this decade.

While this could slow economic growth somewhat, the professional services firm was confident that the private sector will prove strong enough to offset any negative effects on GDP and jobs growth.

The economy will grow by 2.2 per cent this year and 2.3 per cent in 2017, PwC predicted, fuelled by strong consumer spending and business investment.

Potential threats to growth include international uncertainty relating to emerging markets and the forthcoming EU referendum.

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