The number of people placed into permanent job roles in the UK fell for the fourth month in a row, while temp billings expanded at a historically subdued pace, according to the latest Report on Jobs by the Recruitment and Employment Confederation and KPMG.

The report found that permanent placements declined for the fifth time in six months in June. Though modest, the decline still marked a stark contrast to the robust hiring activity reported through 2018, with a number of panellists blaming the fall on political and economic uncertainty.

Demand for staff rose at a subdued pace. The rate of expansion held close to April's multi-year low. Demand for temporary and permanent staff rose at rates that remained weaker than seen on average over the survey's more than two-decade history.  

At the same time, the total supply of candidates continued to decline sharply in June. According to panellists, a generally low unemployment rate and a reluctance to change roles due to heightened uncertainty led to the latest drop in candidate numbers. The fall in permanent worker availability continued to outpace that seen for temporary staff.

The lower candidate availability continued to push up pay for both permanent and temporary workers during June. Permanent starting salaries rose sharply, despite the rate of inflation being among the softest seen for two years, while temp wage inflation quickened to a seven-month high.

Among the regions, permanent staff appointments continued to fall in the Midlands, the south of England and London, but rose in the north of England. Regional data meanwhile indicated that temp billings rose in London and the south of England, but declined in the midlands and the north of England.

The private sector continued to outperform the public sector in terms of vacancy growth in June. Demand for both permanent and temporary staff in the private sector expanded sharply. Meanwhile, in the public sector, temporary job vacancies rose only modestly and demand for permanent workers continued to contract. 

Among the sectors, the IT & computing sector continued to lead the permanent staff demand rankings during June. A steep increase in vacancies was also seen for engineering. The only two sectors to register reduced demand were construction and retail. 

Eight of the ten monitored sectors recorded higher demand for short-term staff in June, led by hotel & catering and nursing/medical/care. In contrast, temporary vacancies fell markedly for retail workers.

“One issue which shows no sign of relenting is the shortage of qualified candidates in some areas, as availability of both permanent and temporary workers remains tight,” Neil Carberry, Recruitment & Employment Confederation Chief Executive said. “Roles such as LGV (large goods vehicle) and forklift drivers, healthcare assistants, as well as manufacturing and production staff are consistently listed as being in short supply.

James Stewart, Vice Chair at KPMG, commented, “As we approach the summer holidays, the worry is that vacancy growth, which held close to a multi-year low in June, is unlikely to bounce back as firms take a relatively cautious approach to hiring. Uncertainty is also likely to further dampen staff availability, as candidates are reluctant to change roles at this time. On a sector basis, IT & Computing continued to need more workers while construction and retail saw reduced demand.”

“Looking ahead, conditions across the labour market are likely to remain restrained against a backdrop of political and economic uncertainty before companies can start to make more informed decisions on their long-term hiring,” Stewart said.