London Sees Sharpest Decrease in Permanent Appointments Since 2009
The number of staff placed in permanent positions within London decreased at a sharp and accelerated rate in June – the steepest since March 2009.
The UK as a whole also saw a considerable decrease in permanent appointments over the month, ending a run of growth stretching back to January.
The rate decline in temp billings in London eased to only a marginal pace during June, and one that was the slowest since last November. At the UK level, temp billings fell at the fastest rate in the current seven-month sequence of decline.
Permanent placements fell in each of the monitored regions bar the South in June, with London seeing the steepest reduction overall. The Midlands was meanwhile the only region to recorded higher temp billings, with notable decreases in the North and South.
June saw a solid decrease in permanent job vacancies across the capital. In fact, the rate of decline was the steepest since August 2009. This compared with a further (albeit weaker) rise in the demand for permanent staff at the UK level. Temp job vacancies in London meanwhile fell at a slower rate, though this still contrasted with growth across the UK as a whole.
Permanent starting salaries in London decreased fractionally in June, reversing a slight increase registered one month previously. Across the UK permanent jobs market as a whole, starting salaries rose marginally.
Average hourly pay rates for temporary staff employed in London decreased for the sixth time in the past eight months in June, with the rate of decline the steepest recorded so far this year. Data at the UK level meanwhile showed that temp/contract pay rates stagnated over the month.
The Midlands and North saw modest rises in permanent starting salaries in June, with falls registered in the South and London. The Midlands also saw an increase in temp hourly rates, and one that was faster than in the only other region to see a rise, the South.
The availability of staff for permanent positions in London improved for the second month in succession during June. Furthermore, the increase was the sharpest in over two-and-a-half years.
Across the UK as a whole there was also an accelerated improvement in permanent candidate availability, albeit one that was less marked than in the capital.
The number of candidates seeking temp roles in London increased for the twenty-second month running in June. Although slightly slower than in the previous survey period, the rate of improvement remained both marked and steeper than the UK average.
Robust increases in the number of candidates seeking permanent jobs in the North and London during June contrasted with slight falls in the Midlands and South. The North and London meanwhile led a broad-based increase in temporary staff availability.
Recruitment and Employment Confederation chief executive Kevin Green says: “London saw a further sharp drop in the number of people placed into work last month, which is really disappointing. A decrease in hiring activity means we could see a period of increased unemployment, especially as a new wave of school leavers and graduates will be entering the labour market over the summer.
“The UK labour market has been remarkably resilient throughout the downturn and our slow economic recovery. However, employer confidence is fragile and it’s not that surprising that under the weight of the eurozone crisis and other bad news placements fell in June.
“I expect as we continue to make slow progress out of recession that we’ll see this kind of a zig-zag
pattern with some good months followed by weaker ones – rather than sustained periods of uninterrupted
“There was further bad news for London jobseekers as vacancies continued to fall. Recruiters tell us that
employers are still hiring, but their increased sense of caution is manifesting in them taking longer to
make decisions and to confirm hires – and that slow down in the recruitment process is clearly having a
negative impact on the number of placements.
“But it’s also important to note that the picture is not uniform across all industries. If you are a skilled
engineer there is still demand for you from employers.”
Iain Moffatt, London Partner at KPMG comments: “The shadows cast by the Eurozone crisis and the faltering UK economy, continue to hang over London employers, who are reluctant to invest, take on new people or expand their businesses at the moment.
“As the Olympic bandwagon rolls into town, employers in London have understandably put recruitment on hold until it becomes business as usual in the Autumn. Only then will we get an indication of whether the engine room of the economy is likely to start powering up this year, or whether unemployment in London will continue to climb.”