The UK could create three million extra jobs by 2025, led by services

Published at 00:01 AM on 10 March 2016

  • Education and health could add over 1 million jobs by 2025 and become the biggest of the services sectors
  • Business services could create around 1.5 million more jobs
  • The number of jobs in manufacturing could fall by a further 600,000 by 2025 but this should be far outweighed by the growth in private sector services jobs
  • UK GDP growth expected to average around 2.2-2.3% in both 2016 and 2017
  • The Budget is likely to confirm plans for further fiscal tightening to eliminate the budget deficit before the end of this decade

Led by the services sector, employment in the UK is set to grow by around three million over the next decade, with the total number of jobs reaching almost 37 million by 2025, according to new analysis by PwC in its latest UK Economic Outlook report.

Education and health, and business services, will lead the way, and together could add over 2.5 million jobs by 2025. However, the number of jobs in manufacturing could fall by a further 600,000 to around two million by 2025 as new automated technologies continue to boost productivity and overseas competition remains fierce. Around 150,000 jobs could also be lost in public administration, defence and social security as austerity measures continue at least until 2020 (see Table 1 below).

John Hawksworth, chief economist at PwC, said:

“The UK has been a powerful job creating machine in recent years and the dominant story of the last century has been the rise of services to its current position as the source of over 80% 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.

“Automation will be a continuing factor in boosting productivity but reducing employment in manufacturing, however, and jobs cuts will continue for some years in central and local government as budgetary constraints continue to bite. But these losses will be far outweighed by gains in the private services sector, fuelled by people working to a later age on average and continued net inward migration of workers.”


UK economic recovery continues, but downside risks remain

The UK economy slowed a little in 2015, but domestic demand growth remains relatively strong, helped by lower oil prices. PwC projects UK GDP growth of around 2.2% in 2016 (revised down slightly from the 2.4% rate projected in November’s report) and 2.3% in 2017.

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John Hawksworth, chief economist at PwC, continued:

 “We expect UK GDP growth to average around 2.2-2.3% both this year and in 2017 with consumer spending and business investment being the main drivers of growth.

“Risks to growth are weighted somewhat to the downside in the short term due to international risks, particularly in relation to emerging markets and uncertainty around the EU referendum. But there are also upside possibilities if the global environment improves and UK productivity growth rates accelerate.

“Inflation will remain low this year but could rise back towards its 2% target by the end of 2017, so the MPC may start to raise interest rates gradually during the course of 2017 and beyond.

“The Budget is likely to confirm plans for further fiscal tightening to eliminate the budget deficit before the end of this decade. This will impose some drag on the UK economy, but the private services sector should be strong enough to offset this in terms of GDP and jobs growth.”


For more information and to download the report, please see:


Gill Carson
PwC | Communications
Office: 020 7212 1391 | Mobile: 07837 285466
Email: [email protected]
PricewaterhouseCoopers LLP
twitter: @gill_carson


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