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Growth of permanent job placements slows in February, jobs report finds

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The growth of permanent job placements rose at its slowest rate in four months during February, a report from the Recruitment and Employment and Confederation (REC) and KPMG shows.

The REC and KPMG Report on jobs, published today provides a comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.

It revealed that recruitment consultancies signalled further increases in permanent placements and temporary billings during February. However, in both cases the rates of expansion moderated.

The report showed that starting salaries for people placed in permanent jobs by recruitment consultancies rose further in February. The rate of inflation quickened to a 17-month high. It also found little-change in hourly pay rates for temporary/contract staff.

The jobs report found growth of permanent placements registered in all English regions during the latest survey period, with the north posting the fastest expansion and London the slowest.

The strongest growth of temporary/contract staff billings was signalled in the north during February. Increases in the midlands and London were only marginal, while the south recorded a slight decrease.

The report found private sector permanent staff vacancies increased at the strongest rate since the start of the series in December 2011, while growth of private sector temporary vacancies was the sharpest in three months. In contrast, public sector demand for staff decreased, although for both permanent and temporary staff the latest falls were modest and weaker than recorded one month previously.

REC director of policy Tom Hadley said: "Competition for candidates intensified this month with private sector employers racing to secure the talent they need for growth from a decreasing pool of skilled workers. Starting salaries have risen to a 17 month high as companies realise they need to make more attractive offers to ensure they can persuade workers to join their workforce and not their rivals.

"There's also noticeable demand for skilled staff to support infrastructure developments such as water and rail. With the Chancellor's Budget only weeks away and more investment in infrastructure expected, a growing concern will be whether or not the UK has the skilled staff needed to get these projects off the ground."

"This month saw increased demand for both temporary and permanent workers across all the sectors we measure, which is a really positive indicator for a continued recovery."

Bernard Brown, partner and head of business services at KPMG, said:

"For six months employment has been rising at such a rapid pace that it seemed to be outstripping economic growth.

"Amid the doom and gloom of recent High Street closures the jobs market made little sense, but the February figures suggest that uncertainty is beginning to reverberate in organisations across the country."