The number of people placed in permanent jobs by recruitment consultancies in the South of England rose for the tenth month running in May. The rate of growth weakened slightly since April, but remained solid and stronger than the UK average.
Permanent placements rose in three out of four English regions in May, the exception being London. The rates of expansion across the South, the Midlands and the North were similarly solid.
Agencies’ billings from the employment of temporary/contract staff increased at a moderate pace in May. This followed a three-month sequence of marginal decline. Temporary staff placements rose in all four English regions in May. The weakest increase was registered in the Midlands, and the strongest in the North.
Permanent candidate supply increases
The availability of candidates for permanent roles in the South of England rose in May, having fallen one month previously. The rate of supply growth was the fastest since last October, and contrasted with a marginal decline across the UK as a whole – the fifth in the past six months.
Permanent candidate availability fell in two English regions in May, namely the North and the Midlands. London registered broadly no change since April.
May data indicated a further increase in the supply of temporary/contract staff in the South of England, extending the current period of growth to ten months. The rate of increase slowed on the month, however, to the weakest in that sequence. Temp supply growth in the South was in line with the national average.
The supply of temp candidates increased in one other English region in May, with the North registering a stronger increase than the South. London and the Midlands both posted marginal declines.
Permanent salary growth weakens
Average starting salaries for candidates placed in permanent positions in the South of England increased in May. The current sequence of inflation now stretches to 11 months, but the rate of salary growth eased to the weakest since last November. Salary growth in the South matched the pace shown across the UK as a whole in the latest period.
Three English regions registered growth of starting salaries in May, at differing rates. The fastest increase was seen in the North, followed by the Midlands and the South. London registered a marginal fall for the second month running.
Temp pay rose for the fourteenth successive month in May. The rate of growth was little-changed from April’s weak pace, and slower than the long-run survey average. It was also weaker than the trend shown across the UK temp labour market as a whole.
Temp pay rates rose in all four English regions in May, as was the case in April. The Midlands recorded the strongest temp wage inflation, while London and the North registered weak increases.
Phil Cotton, regional chairman for KPMG in the South said:
“It looks as if months of rhetoric are finally becoming a reality. With permanent placements increasing for a tenth consecutive month it seems that private sector jobs are boosting the chances of economic growth.
“The latest figures certainly give the strongest indication for some time that the jobs market is on an upward trajectory. However the pay off seems to be a slow-down in salary growth as new starters’ pay has slowed to its lowest level since last November. In other words, as employers look to stabilise and prepare for a more positive economic environment, their message to employees remains one of caution. Right now it’s a position that I suspect most will accept as, with uncertainty still the watch-word, the preference for permanent positions will undoubtedly outweigh moves for more money.”
REC chief executive Kevin Green said:
“This month’s data is a strong indicator that the jobs market, the unsung hero of the UK economy over the last 18 months, is picking up pace.
“Recruiters tell us that employers are more optimistic and are planning to increase their temporary and permanent hiring. This is supported by the expansion of job vacancies and a slight increase in starting salaries.
“The only cloud on the horizon is that the skills mismatch is becoming more pronounced. Employers are struggling to find the skilled candidates they need in sales, marketing and business development to prepare for the upturn in the UK economy, while the majority of the unemployed do not have the skills for the jobs that are available.”