Private sector redundancies in the first quarter of 2012 are set to be at their highest level since spring 2009, according to the latest Chartered Institute of Personnel and Development (CIPD) quarterly Labour Market Outlook Survey. 

The number of private sector firms planning to make redundancies has increased over the last three months, with those planning to make redundancies expecting 4% of their workforce on average to be made redundant.

Net private sector employment has declined from +20 to +10 over the past three months and within the overall figure 31% of private sector services firms intend to make redundancies this quarter, up from 24% in the last quarter’s report.

The increased number is held accountable for the decline in net employment down from -3 to -8 and has undermined hopes that the private sector will compensate for reductions in public sector employment.

The current report suggests a recruitment dip in manufacturing, currently at +1 from +14 in last quarter’s report and in the services sector, down to +11 from +18. However, over the past two years 47% of employers feel they have been prevented from hiring, the main barriers being access to finance (54%) and skill shortages (21%).

Gerwyn Davies, public policy adviser at the CIPD, said: “More private sector firms have decided to push the redundancy button in response to worsening economic news.

“With many employers telling us that access to finance has been a big factor in preventing them from creating new jobs over the last two years, and with net private sector hiring intentions now on the slide, the labour market case for government action to increase the availability of credit to businesses is stronger than ever.”

Results point to a further widening of a north-south divide with the net employment balance for the south of England improving to -1 from -4 in the past three months, as the net balance for the north fall to -20 from -17 over the same period.

Other key findings of the report include an expected increase in the next five years in the demand for roles in business and development, sales and marketing and IT staff, as well the prospect that six out of 10 LMO employers are not planning to create any new roles in the next three months.