Dr. Robert Kelly:

There are two elements when we think about the labour market. One is that we have what would be seen as a more general easing. I would point to two things in this regard but we need to set the context. We had an extremely high level of demand for labour coming out of the pandemic and there is also supply, whereby we have seen people returning from inactivity into the labour force and quite a lot of migration. However, there are signs in the past six months that there is easing within the system. For example, if we look at the number of people working part time who say they are available and willing to work extra hours, we see quite a large increase in that. It has been up about the mid-30,000s in the past year, so there are now more people in that category than there are unemployed. That is for the general labour market.

When we think about housing in particular, what we would point to is that we have seen a slowdown in commercial real estate development. A crucial point here is skills matching. For example, tradesmen who work in construction on commercial real estate can potentially be redeployed to the delivery of housing. While we would have seen labour shortages in the construction sector, they are alleviated to some degree and are potentially transferable to the delivery of housing. That is one area that potentially creates labour supply for the delivery of housing when, previously, there was a much higher level of demand across commercial and housing.