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Demand for staff in July continued to increase but rose at the slowest pace for eight months

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Increases in permanent and temporary staff appointments continued during July but in both cases the rates of growth continued to ease reaching eight-month lows.

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs found overall demand for staff rose at a slower pace in July, with the rate of expansion easing to an eight-month low. Both permanent and temporary staff vacancies recorded weaker rates of growth. The most in-demand category for both types of staff was engineering/construction. 

The rate of increase in permanent staff salaries accelerated to the fastest for almost two-and-a half years in July. However, temporary staff pay growth eased to only a modest pace that was the slowest in four months.

For the second time in three months, permanent staff availability decreased in July. Temporary staff availability rose, but the latest improvement was the weakest in the current 28-month period of growth.

Kevin Green, chief executive of the REC, said: "This month’s data confirms a significant deceleration in the jobs market with the rate of expansion easing to an eight-month low. This is the first real indicator that cuts in the public sector are beginning to bite. Nowhere is this more apparent than in nursing and medical care where demand for both permanent and temporary staff has fallen away drastically compared with last year when it was the only sector experiencing growth.

"With 600,000 job cuts forecast in the public sector over the next year, the Government must do everything possible to boost job creation in private sector – in particular, by reducing business taxation and regulation. At the same time, public bodies must avoid knee-jerk cuts to staffing levels, which not only threaten the recovery of the UK jobs market but also undermine the delivery of key services."

Bernard Brown, partner and head of business services at KPMG, added: "The UK job market continued to slow down in July with overall demand for staff rising at the slowest pace in eight months. Surprisingly, engineering and construction is the sector where staff was most in demand, an indication of a sustained recovery in the manufacturing sector. However, the sharp decline in the demand for healthcare professionals comes as a direct result of government cutbacks and cost reduction in the NHS, and is a sign of things to come as the public sector prepares for more spending cuts that are likely to impact the jobs market further."