Only 1.1 per cent of Oxfordshire's working population is claiming the Jobseeker's Allowance, compared with a national figure of three per cent.

Half of all employers in the South East plan to recruit extra staff in the coming months, according to a study by the Chartered Institute of Personnel and Development (CIPD).

CIPD chief economist John Philpott said: "With the economy continuing to grow at a healthy rate, recruitment activity is picking up in the private sector, adding to recent increases in the number of people in work.

"However, owing to efforts by the Government to encourage Incapacity Benefit claimants back into work and ongoing recruitment of migrant labour, this has not yet brought about lower unemployment."

Michael Carter of KPMG, which helped with the research, said: "Recruitment intentions have improved since last year, but this trend is not repeated universally."

One problem is that Oxfordshire is becoming a victim of its own success, with job hunters from across Europe lured here by the low unemployment, making it difficult for local people with no qualifications to compete.

Dawn Pettis, the council's economic development and housing programme manager, said: "We have many people moving into the county to take up employment, and it is worrying for us as a local authority that we have specific communities where people do not have the skills to access employment - places like Blackbird Leys, Barton, Berinsfield and parts of Banbury."

Claire Prosser, of the Thames Valley Chamber of Commerce, said employers were now crying out for staff with science qualifications, since fewer students were taking science subjects at GCSE and A level.

However, she said other jobseekers need not despair. "It is the soft skills that employers are looking for, particularly communications and computer skills, and the ability to learn."

Retailers are expected to recruit heavily as they gear up for Christmas. The high street enjoyed a bumper month in August, according to a survey by the Confederation of British Industry.

The Didcot area is seeing a boom in job creation, with a new Bathstore centre creating up to 180 jobs and a new Medequip depot (see below). Valspar Industries is recruiting for its paints and coatings site at Milton Park.

However, things are less rosy in the public sector. Hundreds of staff at the John Radcliffe and other local hospitals have received redundancy notices. Nationally, only one in five public-sector organisations said they would increase their workforce, while a third predicted redundancies.

The Bicester area has been hit particularly hard, with some 300 staff at the Defence Logistics Organisation in Caversfield told the site will close within four years.

In July, another 180 job cuts were announced at MoD sites in Ambrosden, Arncott, and D-site, near Bicester.

David Simpson, president of Bicester Chamber of Commerce, said: "The loss of almost 300 jobs is devastating and will not easily be replaced. Unemployment in Bicester is low, but specialist staff may find it difficult to obtain further employment."

Maggie Hartford