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UK - Slowest growth in jobs in seven months

08 June 2011

There has been a worrying deceleration in the UK jobs market in May 2011, according to the latest Report on Jobs published today by the Recruitment and Employment Confederation (REC) and professional services firm KPMG. In spite of signs of increasing employer confidence in some sectors, economic growth remains too fragile to spark the real step-change that the UK jobs market needs.

Permanent placements and temporary billings both rose at the weakest rates in seven months. Growth of job vacancies moderated to a five-month low in May. Weaker rates of expansion were recorded for both permanent and temporary positions.

Although permanent staff salaries continued to rise in May, the rate of inflation eased to a three-month low. Temporary staff pay increased at the weakest rate in the current four-month sequence of growth.

Recruitment consultants signalled a modest improvement in the availability of staff to fill job vacancies during May. However, the rates of growth of both permanent and temporary candidate availability eased since the previous month.

Kevin Green, Chief Executive of REC, commented "the latest data shows a worrying deceleration in the UK jobs market. Although the number of placements has continued to increase, the rate of expansion has hit a seven-month low. Private sector job creation has not hit the buffers but it is clearly slowing which heightens concerns over whether public sector job losses can be absorbed."

"The feedback from recruitment professionals confirms a real paradox in the current jobs market, namely, the ongoing challenge of finding suitable candidates in a number of sectors. With the government's much discussed 'Work Programme' formally getting underway this month, the question now is whether it will be able to deliver the training and guidance necessary to address the current disconnect between employer needs and available candidates. Looking ahead, the mismatch between vacancies and skills available could hinder future growth."

Bernard Brown, Partner and Head of Business Services at KPMG, said "the latest figures are worrying, because they reveal a marked slowdown of the UK jobs market. We'll need to see whether this is a trend or a blip. Employers across all sectors are becoming more cautious about hiring new staff."

"With businesses and consumers now being hit by higher taxes and fuel costs, public spending cuts and a continuing squeeze on real incomes, this is perhaps no surprise. The hope now is that growth in the UK will pick up later this year, led by a private sector recovery absorbing job losses in the public sector."

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