Permanent placement growth in the UK softened to nine-month low in July, according to the latest Report on Jobs from the Recruitment and Employment Confederation.

The REC’s Report on Jobs showed that while permanent placements continued to rise sharply in July, the rate of expansion was the softest recorded since last October.

Recruitment agencies indicated that candidate shortages weighed on permanent staff appointments. The REC also noted that the supply of both permanent and temporary candidates fell sharply in July, despite rates of decline easing to the weakest in three months in both cases.

Meanwhile, low candidate availability and robust demand for staff led to a further steep increase in salaries awarded to permanent starters. At the same time, temp pay rates rose at a marked and accelerated rate that was close to April’s two-year record.

 The demand for staff strengthened in July, with overall job vacancies expanding at the quickest rate for eight months. Growth was led by the private sector, with demand for both permanent and temporary workers continuing to rise at rates that comfortably outstripped those seen in the public sector.

The report also found that temp billings saw a strong increase with the rate of growth picking up from June’s recent low.

Sophie Wingfield, REC Head of Policy, commented, “The rise in interest rates for only the second time in a decade may leave some people feeling the pinch. But a new job is one way people can ease the burden on their finances. With our data showing starting salaries continuing to rise, the latest official government figures suggest that we are finally seeing the effects of a tighter labour market feed through to pay.

“Following a period of turbulence and big name closures, the World Cup and heatwave had retailers enjoying a ‘summer bounce’ and basking in the sun with demand for temporary staff on the up with many businesses positively revising their hiring plans. Right now students on their summer break can make the most of these opportunities and cash-in while gaining valuable experience and new skills,” Wingfield said.

By region, permanent placements rose at faster rates in the Midlands and the South of England, but growth softened in the North of England. In contrast, permanent staff appointments fell slightly in London.

Growth of temp billings was broad-based across the four monitored English regions during July, with the sharpest rate of increase seen in the North of England.

As for demand for staff, the report found that demand increased at a considerably stronger pace in the private sector than in the public sector.

Meanwhile, the strongest increase in staff vacancies was seen for permanent private sector workers, while the weakest rise was signalled for public sector permanent roles. 

IT & Computing was the most in-demand category for permanent staff in July. Nonetheless, steep increases in vacancies were also registered in the remaining nine job categories. The slowest rise in demand was reported for retail workers.

Temporary staff vacancies rose across all of the ten monitored job categories in July, with the sharpest increases seen across Blue Collar and Nursing/Medical/Care. The slowest, but still marked, rise in short-term roles was signalled for Executive/Professional.