Report on Jobs: North of England

July 09, 2012 /

There was a marked turnaround in the trend of permanent placements in June. Following a run of ten months of growth, latest data showed a marked drop in the number of staff placed in permanent positions. Recruitment consultants simply attributed the fall to a lack of new business.

A second consecutive monthly reduction in temporary staff billings was signalled during June. Moreover, the rate of contraction accelerated and was the sharpest registered for just under three years. Additional bank holidays played a part in the reduction, although lower business at clients also led to the fall.

June’s marked fall in permanent placements in the North of England, following several months of growth, was matched by a similar trend at the UK level. There was also a further reduction in UK temp/contract billings, although the rate of contraction was weaker than in the North of England.

In June, there were decreases in permanent placements in London and the Midlands, but growth in the South of England. For temp workers, expansion was seen in the Midlands but contractions were registered in London and the South of England.

Only a modest increase in permanent staff salaries was signalled by June’s survey, although the rate of
inflation was above that seen at the national level. Latest data marked the fifth time in 2012 so far that
salaries have increased. Some panellists indicated June’s rise to an increase in the placement of skilled
workers.

A second consecutive monthly fall in temp/contract rates was indicated by June’s survey. The reduction was, however, only slight, with over 90% of the survey panel indicating no change in temp pay rates since May.

The modest increase in permanent salaries seen in the North of England was above the UK average during June, while the slight fall in temp pay compared to little change at the UK-wide level.

London and the South of England both recorded drops in permanent salaries in the latest survey period, compared to solid inflation in the Midlands. A modest rise in temp pay was also recorded in the Midlands, while the South of England recorded a fractional increase. London saw a fall in temp pay during June.

The availability of permanent staff in the North of England increased for a fifteenth successive month in June. Moreover, the rate of growth accelerated again, reaching the strongest since January, and was well above the UK average.

A twenty-second consecutive monthly increase in the availability of temporary workers was signalled by June’s survey. The rate of growth was again marked, though weakened since May and was well below levels seen at the start of 2012.

Candidate availability for both types of worker in the North of England rose at sharper rates than at the
UK level during June.

There were also concurrent increases in availability seen in London, but reductions in permanent staff
availability were recorded in the Midlands and the South of England.

Recruitment and Employment Confederation chief executive Kevin Green says: “The sharp drop in the number of people placed into work last month in the North 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 jobs growth.

“There is still demand for workers and vacancies continue to rise. 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 IT professional or looking for secretarial work there is still increasing demand for you from employers.”

Jonathan Hurst, Chairman of KPMG in the North, comments: “After ten months of consistent growth, the sharp
decline in the number of permanent and temporary placements seen across the North in June certainly brings us back down to earth with a bump.

“While we can take small comfort in the fact that this sudden decrease is symptomatic of what is happening across the majority of the UK, it does act as a stark reminder that there’s a long way to go before we turn an economic corner.

“Indeed, with continued uncertainty in both the Eurozone and the financial markets creating nervousness around long-term investments, it would be a confident person who says that this month’s fall in recruitment is a temporary one. Here’s hoping that the modest growth seen in the IT, Engineering and Construction sectors is enough to temper any further dents in confidence.”

 

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