Key points:
- Growth of permanent placements eases
- Temporary/contract staff appointments fall at fastest rate since July 2009
- Midlands outperforms the rest of the UK
- Engineering and construction sector sees growth in both permanent and temporary vacancies
- Weak pay growth signalled
Summary:
The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.
Modest rise in permanent placements
Recruitment consultancies signalled another modest rise in permanent staff placements during May, but the rate of growth was the weakest in the current five-month period of expansion. Temporary/contract staff billings decreased for the sixth month running, and at the fastest pace since July 2009.
Vacancy growth weakens
Overall demand for staff rose at the slowest rate in four months during May. Weaker increases in vacancies were signalled for both permanent and temporary/contract workers.
Pay pressures remain muted
Permanent staff salaries rose at the fastest rate for eight months in May, but the increase was only modest and well below the long-run series average. Temporary/contract staff pay rose at the weakest rate in five months.
Regional and sector variation
The Midlands remained the strongest performer across the English regions in terms of both permanent and temporary jobs during May, while London continued to underperform.
By sector, demand for staff was reported to have risen at the fastest rates for IT and Engineering/Construction staff.
Comments:
Bernard Brown, Partner and Head of Business Services at KPMG, comments: “The latest Report on Jobs shows that the total number of hours worked per week in the UK increased by 8.4 million in the first quarter of 2012, compared to the previous three months. The hope is that all this extra effort can have a direct and positive effect on expanding the UK economy. Yet, judging by recent economic output data, there is a concern that we are simply working harder – but not necessarily smarter – and that real productivity growth still remains elusive.
“With the number of people securing permanent jobs increasing for the fifth consecutive month and official figures showing a drop in unemployment, it would be easy to assume that we are turning a corner. The reality, sadly, remains very different as the latest figures highlight the lowest monthly rise since last December, indicating a return to uncertainty and cautiousness when it comes to recruitment on the part of many employers.
“At least there are pockets of good news, with the Midlands remaining the strongest performer in terms of permanent placements and IT, engineering and construction also remaining in pole position when sector data is taken into consideration.”
Kevin Green, Chief Executive of the Recruitment & Employment Confederation, says: “This month’s data shows employers are becoming more cautious about hiring and while there is still growth in permanent placements, the figures have been getting weaker over the last two months. Clearly the economic backdrop and the eurozone crisis are making some employers think twice before taking on new staff.
“What’s interesting are the niche areas that are seeing much stronger growth than the national average. In every month this year, the engineering and IT and computing sectors have seen solid increases in the number of workers recruited for permanent roles. And compared to other parts of the country, employers in the Midlands are confident about hiring more temporary and permanent employees.
“The temporary staff market has been contracting for the last six months, however, it's important to note that there are still over a million people per week working flexibly. Employers value the ability to flex their staffing costs based on current and future demand. In temp work too there are certain skills that are still in high demand – such as drivers, chefs and a whole range of IT expertise.
“Looking ahead, it’s likely that unemployment figures will rise over the next few months as another wave of young people leave education. We have a weakening jobs market which will only improve once demand returns to the economy. More jobs being created in the private sector in 2012 is vital for our overall economic recovery so anything which boosts confidence is good news – the jubilee and the Olympics may yet help us turn the corner.”
Full reports and historical data from the Report on Jobs are available by subscription. Please contact economics@markit.com.
Ends
For further information, please contact:
KPMG
KPMG Press Office, Telephone 0207 694 8773
REC
Helen Ablett, Telephone 08453 700655
Markit Economics (technical/data queries):
Jack Kennedy, Telephone 01491 461087
Note to Editors:
The Report on Jobs is a monthly publication produced by Markit on behalf of the Recruitment & Employment Confederation and KPMG. The report features original survey data which provide the most up-to-date and comprehensive monthly picture of recruitment, employment and employee earnings trends available.
The Report features original research data from Markit, collected via questionnaire from a panel of 400 UK recruitment and employment consultancies. In 2010/11, some 1,049,333 people were employed in either temporary or contract work through consultancies and 604,193 people were placed in permanent positions through consultancies. Data for the monthly survey were first collected in October 1997 and are collected at the end of each month, with respondents asked to specify the direction of change in a number of survey variables.
All Index numbers are calculated from the percentages of respondents reporting an improvement, no change or decline. These indices vary between 0 and 100 with reading of exactly 50.0 signalling no change on the previous month. Readings above 50 signal an increase or improvement; readings below 50 signal a decline or deterioration. Reasons given by survey respondents for any changes are analysed to provide insight into the causes of movements in the indices and are also used to adjust for expected seasonal variations.
Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first published seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please contact economics@markit.com.
A regional Report on Jobs series is now available comprising four regional reports tracking labour market trends across the Midlands, the North of England, the South of England and London. The reports are designed to provide a comprehensive and up-to-date guide to labour market trends and the data are directly comparable with the UK Report on Jobs.
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
Recruitment and Employment Confederation
15 Welbeck Street, London, W1G 9XT. Tel: 020 7009 2100. Fax: 0207 935 4112 Website: www.rec.uk.com
The REC is the professional body representing the UK’s £24.6 billion private recruitment and staffing industry with more than 8,000 recruitment agencies and 6,000 recruitment consultants in membership. There are more than 1 million temporary workers registered with UK agencies who are deployed in industry, commerce and the public services every day.
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