Permanent placements growth reached a 27-month record in July while growth in temp billings improved to a near two-and-a-half year high, and a decline in staff availability contributed to further increases in pay according to the most recent Markit/REC (Recruitment and Employment Confederation) Report on Jobs.

This month’s Report on Jobs also showed that recruitment agencies signalled a sustained and marked increase in demand for staff. Furthermore, overall demand for staff rose at its joint-strongest pace for 23 months (on par with May 2017). Meanwhile, the availability of both permanent and temporary workers continued to fall sharply during July. The rate of reduction eased for permanent staff, but the availability of temporary candidates declined at the quickest pace for just over a year-and-a-half.

Regionally, the strongest upturn in permanent placements was recorded in the Midlands, closely followed by the North of England. The weakest increase was seen in London, where growth softened to an eight-month low. All monitored regions saw sharp increases in temp billings during July, led by the North of England.

Demand for staff continued to rise sharply during July, as shown by the Report on Jobs Vacancy Index posting well above the no-change 50.0 threshold at 63.4. This was up slightly from 63.2 in June and the joint-steepest increase seen since August 2015 (on par with May 2017). Similarly, steep increases in vacancies were registered for both permanent and temporary job roles. The demand for staff across the private sector continued to outpace that recorded for the public sector in July. The number of vacancies at private sector companies increased sharply overall, with growth picking up slightly since June. However, growth in demand for both temporary and permanent workers softened across the public sector.

Starting salaries for successful permanent candidates rose further in July, with the rate of inflation reaching a 20-month record. At the same time, hourly pay rates for short-term staff continued to increase sharply.

July survey data signalled sharp increases in demand for permanent workers across all monitored job categories, led by Engineering.

Blue Collar recorded the quickest upturn in temporary staff demand of all nine job categories in July. Hotel & Catering and Nursing/Medical/Care also saw steep increases in demand, while Executive/Professional placed at the bottom of the table.

“The jobs market continues to confound expectations with both permanent and temporary placements growing at the fastest rate for over two years,” Kevin Green, REC Chief Executive said. “Starting salaries are also still rising, so for workers who want to boost their earnings now is a good time to consider moving job.

“It's clear that employers are having to work even harder to fill jobs as vacancies rise and candidate availability shrinks,” Green said. “UK employment remains at an all-time high and looks set to keep improving. The parts of the economy most reliant on European workers are under even more pressure as many EU workers return home. Employers are not just struggling to hire the brightest and the best but also people to fill roles such as chefs, drivers and warehouse workers.”

“London, in particular, is feeling the Brexit effect,” Green said. “Hiring is still growing but at a much slower rate compared with every other region of the UK. Financial services, a crucial part of the London labour market, are not hiring in their usual quantity as the uncertainty caused by Brexit makes them hesitant.”

“We can’t ignore the importance of our relationship with the EU to employers,” Green said. “If we want to keep our jobs market successful and vibrant, we must make it easier, not harder, for employers to access the people they need.”