06Aug

Job market continued to weaken in July as demand for staff fell


The Report on Jobs is a monthly publication produced by Markit Economics and sponsored by the Recruitment and Employment Confederation and KPMG LLP.

The report features original survey data which provide the most up-to-date monthly picture of recruitment, employment, staff availability and employee earnings trends available.

Key points from July survey:

  • Permanent placements fell for a fourth successive month and at the sharpest rate since December 2001. Temp billings rose marginally, but at the slowest pace in over five years.
  • Demand for permanent staff fell for the second month running, with the latest drop the fastest for six-and-a-half years. Demand for temp staff declined slightly for the first time in the survey history.
  • Nursing/Medical/Care remained the most sought-after category for both permanent and temporary staff.
  • Strong rises in permanent and temporary candidate availability.
  • Weakest increases in permanent salaries and temp pay for five years.

Commenting on the latest survey results, Alan Nolan, Director at KPMG said:

“This is yet another worrying set of statistics, confirming that the financial crisis continues to deepen. Particularly concerning is the construction sector, which usually shows a strong requirement for temporary labour. This sector has weakened dramatically over the first half of the year, caused in the main by a dramatic fall in construction output through the lack of new housing projects. Overall, cost reduction programmes remain at the top of the boardroom agenda with business leaders remaining extremely cautious about taking on permanent staff. At the same time the increased cost of living and pressure on take-home pay continues to fuel an increase in candidate availability.”

The main findings for July are:

Downturn in permanent placements gathered pace…

Recruitment consultancies continued to report falling levels of permanent appointments in July, with the rate of contraction accelerating to the sharpest in seventy-nine months. Lower placements reflected a further reduction of demand for permanent staff; vacancies declined at the fastest pace in six-and-a-half years.

…while growth of temp appointments weakened

Although temporary/contract staff billings continued to rise in July, the rate of growth eased to only a marginal pace that was the slowest in over five years. Underlying the weaker increase in short-term appointments was a slight fall in temp vacancies for the first time since the start of the survey in October 1997.

Candidate availability rose strongly…

The recent upward trend in staff availability continued in July, with agencies reporting sharp increases in the supply of permanent and temporary candidates. In both cases, the latest improvements were the strongest for over five years.

…dampening pay inflation

Rising candidate supply and weakening demand for staff resulted in a moderation of pay growth during July. The rates of inflation of permanent salaries and temp wages eased to five-year lows.

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