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EDITOR’S TAKE: At least you don’t work in the real economy

It’s very vogue to recommend that bankers reinvent themselves as engineers/plumbers/pizza deliverers, but just don’t rush into anything.

When recruitment firm Michael Page released its first quarter trading update this week, it transpired that things aren’t that bad after all.

Michael Page’s stats suggested financial services hiring was down 37% year on year in the first quarter of 2009. This is bad. But hiring in ‘legal, technology, HR and secretarial’ was down 42%. And hiring in ‘marketing, sales and retail’ was down 48%.

Admittedly, the engineering sector so beloved of amateur career advisors wasn’t impacted quite as badly (down 18%), but as the recession spreads, who’s to say it won’t be next. In the meantime, as Steve Ingham, Michael Page chief executive, pointed out, financial services was the first industry to go into the downturn and it may be the first one to come out.

Until then, official figures suggest the unemployment rate in the financial sector is low. Just 6% of US finance workers are out of work. The most recent figures for the UK (4Q08) say only 3.9% of people from banking and insurance are on the dole. This compares to 6.6% of construction workers and 6.3% of people formerly employed in hotels.

The unemployment rate in the City is obviously a little above 4%. Richard Snook, senior economist at the Centre for Economics and Business Research is predicting a peak (2007) to trough (2010) fall in City-type employment of 350,000 to 290,000. So far, Snook says slightly fewer than half these jobs have gone, suggesting around 9% of City people are now unemployed.

If Snook’s right, City unemployment could rise to 20% in future – but this would assume that anyone losing their job over the four year period hung on looking for something similar. Instead, lots of people seem to be leaving to become engineers, teachers, etc. They may not be able to find a job very easily, but having left the City they are unlikely to come back soon. And this is very, very good thing for everyone who stays behind.

Comments (10)

  1. GDP will go down. Karma will go up. Now the silly moneys left banking our brightest minds can follow their hearts without fear of opportunity cost. It’s going to hurt bigtime but the world will be a better place. The future is getting much more interesting…

  2. Is real economy the next finance services industry?

  3. All these percentages being bandied around mean absolutely nothing. Banking is in dire straits. I, for one would not rely on “research data” from Michael Page – a recruitment agency trying to give itself and its employees a psychological boost.

    You made a good observation yesterday, all the trimmings so far will save banks a pittance in costs and overheads. i.e. cutting back-office, HR, admin, IT etc. The real rout will begin soon when entire FO operations get displaced. But hey, who will care then?!

    Personally, you heard it here first – BarCap…Ha h ah ah ah ah ha ha ha.

    Mr. Frank White Reply
  4. Sarah, I can assure you that engineering won’t be badly impactly as other sectors. I’m tempted to exclude civil and structural engineers, but then recession or no recession, London is hosting the Olympic Games, so their jobs will be safe in the long run. Yes, the automotive industry will suffer, but then R&D will thrive as the quest for clean energy and technology gathers pace. The nuclear industry is going through a revival, with opportunities abound, and although the major aerospace companies (Boeing and Airbus) were not able to ramp up, as promised, the pace of production has been maintained.
    There’s always been a shortage of engineers, especially the good ones. Our jobs are safe.

  5. Is Pizza Hut the new Goldman Sachs?

  6. Is Sarah my next gf?

  7. Sarah, awesome comment! lol

  8. Is the real economy the real real economy?

  9. “The most recent figures for the UK (4Q08) say only 3.9% of people from banking and insurance are on the dole. This compares to 6.6% of construction workers and 6.3% of people formerly employed in hotels.”
    – Srah never occurd to you, that you have to posess very little indeed to be able to receive dole? Most people who had at least 1 brain cell will have managed to save a few quids, and exactly that will prohibit them from stretching the hand out for the esy pound.. where as people in the hotel business often work on minimum wage..

  10. Senor Peppe, behave yourself

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