Much of the talk of 'green shoots' recently has centred on the emergence of increasing amounts of positive survey evidence. In large part this has driven the recent stock-market rally. In the UK, the Charted Institute of Purchasing and Supply (CIPS) Purchasing Manager Index (PMI) measures a composite of employment, production, new orders, supplier deliveries and inventories for major economic sectors.

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Oil rallying on signs of global recovery

In July 2008 the oil price reached an historic high of $147 per barrel. By February 2009 it had fallen all the way down to just below $40. This collapse was driven by the global recession and the consequent drying up of demand. However, since then oil has again been on an upward trajectory.

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But unemployment is rising

The unemployment level in the UK has been growing since late 2004. At the start of 2008 unemployment really started heading upwards, and the latest figures show 2.261 million people over 16 unemployed, giving an unemployment rate of 7.2 per cent. High unemployment remains a much worse problem in the most deprived areas of the UK. However, what is really interesting is that the least deprived areas of the UK have seen the biggest increase in unemployment.

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And will be for a long time after the recession ends

Many economists are expecting unemployment to hit or exceed the 3 million mark. This would imply an unemployment rate of around 9.6 per cent. By historical standards this rate would not be massive – in the ‘90s recession unemployment peaked at 10.7 per cent, and 11.9 per cent in the ‘80s. What is certain is that unemployment will continue to rise even after the recession is over.

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