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Demand for new staff drops 2% since June

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Employer demand for new UK workers slipped 2% in July compared to June, according to recruiter Reed.

New job demand dropped back across a range of job sectors, including accountancy, financial services and customer service, while banking jobs continued their five month decline from February's high point.

Demand for new public sector staff remained flat, close to half its level when the Index began. However, other sectors bucked the trend, led by the Retail Job Index, which reached its highest point since the Index began (with retail vacancies up 52% since 19 months ago) supported by rising demand for leisure and tourism staff.

Indicators of future economic growth were seen across industrial as well as business services sectors with rising demand for IT & telecoms, motoring and automotive, purchasing, transport and logistics, construction and HR staff in July. Overall year-on-year employer demand is 22% above the level of December 2009. Martin Warnes, MD of reed.co.uk, said: "Economic confidence at the start of the third quarter appears to have flattened out, according to the latest Reed Job Index figures.

There is residual fragility in the economy which has dampened demand for new staff and continues to restrain salaries. "However job demand is still 20% up on this time last year and July's figures include other positive indications for the future. New jobs increased in key sectors from IT and telecoms to construction and the car industry, which looks promising for long term growth, while the 19-month high in retail recruitment suggests employers believe consumer confidence is set to rise."