The Big Picture
It will surprise nobody to hear the employment market has been tough for a while now. The headwinds are well known: geopolitical instability, high inflation and low growth, a large budget deficit, cautious business outlook, increased costs of hiring – the list could go on.
Despite this, the UK economy’s performance has been much like a mid-range pillow: soft, but not quite down. Growth has been less disappointing than anticipated[1][2], and it appears reports of the UK’s productivity death were greatly exaggerated.[3][4]
Similarly, there are signs of life in the job market – the latest REC/KPMG report highlights a rise in permanent placements (the first since Sep 2022), while temp billings marked a fifth consecutive month of growth.[5]
Nevertheless, a big picture view always obscures nuance. Different sectors face different challenges and opportunities, which don’t always sit neatly in a macro summary.
This article is an attempt to look beyond the headlines and answer the question: “how are the sectors that we serve faring?”
Design & Manufacturing
Sentiment
Earlier in the year it looked like Design & Manufacturing had been caught right between the eyes by the US-Iran war. With energy costs spiking and supply routes disrupted, confidence had fallen to a four-year low by June.[6] Since then, the mood has lifted considerably.
It seems UK manufacturing is now feeling more sanguine about things – confidence has risen for the first time in 18 months[7], while the latest PMI survey found the most upbeat growth outlook since February.[8] New projects beginning, higher investment in productive capacity, electricity bill cuts arriving next year, and record defence spending with UK industry were some of the factors threatening manufacturers with a good time.[8][9][10] Costs remain a concern, but the overall picture is a positive one.
Design meanwhile is harder to assess, not least because designers operate cross-sectorally. Nonetheless, using the creative industries more broadly as a proxy, the most recent sentiment data presents a more circumspect attitude than that of manufacturing. A census of over 4,000 creative industries professionals found that 59% felt burnt out, 32% had redundancy fears, and 65% said their career path was unclear.[11] With salaries stalling and hiring largely restricted to essential hires, there is a tangibly gloomy feeling.
Job market dynamics
As is covered in the full report, we have used vacancy rates as a key data point in assessing job market dynamics.
Briefly, the vacancy rate is the number of unfilled job vacancies divided by total jobs (both filled and unfilled). A high vacancy rate indicates a tight labour market, where job vacancies are abundant relative to people. Conversely, a low vacancy rate means lower demand for staff. Vacancy rate is therefore one of the clearest barometers for how employer demand stacks up against employee availability.
At 2.0%, manufacturing’s vacancy rate bestrides its long-run average and is the only one of our sectors not running below par.[12] Online job adverts point the same way: Adzuna found July manufacturing vacancies up 2.2% versus a year earlier – the sector’s first annual rise this year, compared with a nearly 10% YoY fall in UK-wide vacancies.[13]
The hiring picture beneath that is more mixed. The PMI survey saw a sixth consecutive month of hiring in manufacturing[8], while Make UK reported firms were holding back on hiring volumes[7], which perhaps reflects that what confidence there is within the sector is distributed unevenly.
For design, much like finance, there are clear dividing lines in the recruitment data. Technical design skills feature prominently among the REC’s skills in short supply, while creative and UI/UX specialists appear among those in excess supply.[5] Yet despite this apparent need for technical proficiency, many employers don’t seem to be investing in upskilling – with less than 20% of employees in creative industries receiving any technical training last year.[11]
Design & Manufacturing: the bottom line
Manufacturing has recovered its poise after a bruising first half. Confidence has lifted, and its vacancy rate is sitting right at its long-run average, which is a rare feat at present. Design is more subdued, with burnout and redundancy fears widespread. There is also a clear split between technical design skills, which are in short supply, and creative and UI/UX skills, which are not.
For employers: manufacturing remains one of the steadier hiring markets, so plan ahead for scarce technical skills. Few employers invest in technical training, so those that do may find it gives them a real edge in attracting and keeping talent.
For candidates: manufacturing is a relative bright spot. For designers, adding technical capability to creative strengths is likely to be the surest way to stand out.