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Growth of permanent jobs continues but at slowest rate in six months

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Increases in permanent and temporary staff placements were recorded in March but the rises were only slight and the slowest in six months, the latest monthly jobs report from KPMG and The Recruitment and Employment Confederation (REC) has found.

The report showed the availability of permanent job roles decreased for a fourth successive month in March. However, the rate of deterioration remained only modest. The availability of temporary/contract staff meanwhile increased slightly, maintaining the trend seen since the turn of the year.

Pay for both permanent and temporary staff followed the same trend, with salary increases showing a slight rise.

Private sector vacancies continued to increase during March. Expansions were signalled for both permanent and temporary staff, albeit at slower rates compared with February.

In the public sector, demand for temporary workers increased for the first time in three months. However, demand for permanent employees was down marginally.

Demand rose for all eight types of permanent staff monitored by the survey during March. The strongest rate of expansion was signalled for IT & Computing workers. Hotel & Catering registered the slowest growth of vacancies.

The report found that for the fourteenth consecutive month, nursing/medical/care was the most in-demand category for temporary/contract staff during March. Engineering/construction workers were also highly sought-after in the latest survey period. In contrast, demand for hotel and catering staff fell for the first time in six months, albeit marginally.

Bernard Brown, partner and head of business services at KPMG, said: "The jobs market is finally catching up with the prevailing GDP picture as confidence among employers and candidates drops to a half-year low."

Brown added: "For those staff who are in place the problem remains one of being over-stretched and the longer this goes on, the less productive they will become. Employers clearly recognise that they need to ask some searching questions to solve this issue, but are unlikely to act on what they discover in the near future.

"Perhaps, once the measures announced in last month's budget start to take effect, we may see a positive impact on business confidence, but there is a long way to go and forecasts for a flat GDP for the rest of the year do not bode well."

REC chief executive Kevin Green said: "The fact that in March more people secured jobs than in the previous month is obviously good news, although the rate of growth has slowed. However the most significant issue is the emergence of a two-speed labour market with a lack of candidates for highly skilled roles at the same time as persistent levels of unemployment.

"The Government needs to build the talent pipeline for the future by increasing funding for apprenticeships in sectors where there is demand, refocusing the Work Program to train people who have potential but who lack the skills to fill current vacancies and driving take-up for existing schemes like the Youth Contract."

The jobs report, which is published today, provides one of the most comprehensive guides to the UK labour market and draws on original data provided by recruitment consultancies.