– KPMG/REC: UK June Permanent Placements 46.8 vs 51.0 In May

LONDON (MNI) – The number of people placed in permanent jobs fell
for the first time in six months during June, and at the fastest rate
for just under three years, according to the latest Report on Jobs from
the Recruitment and Employment Confederation and KPMG.

The report suggests that the weakness in the UK economy is
beginning to have an effect on the jobs market with the number of people
placed in temporary positions also falling and growth in the number of
job vacancies slowing.

The survey showed the permanent jobs indicator dropped to 46.8, its
lowest level since July 2009 and down from the 51.0 hit in May. The
temporary/contract staff billings indicator fell to 47.1, down from the
47.5 seen in May.

An index reading above 50 signals a higher number of
placements/billings than the previous month. Readings below 50 signal a
decline compared with the previous month.

The data suggest the official labour market data could well take a
turn for the worse.

“The labour market is showing renewed signs of weakness having
shown some resilience in the early part of the year; the latest survey
data chime with a rise in the claimant count during May, and suggest
that the wider Labour Force Survey measure of unemployment will also
start to show fresh increases in the coming months,” Jack Kennedy,
senior economist at Markit, said.

KPMG/REC said the survey showed that a slowdown in activity at
client companies and employers taking longer to make recruitment
decisions were the reasons behind the fall in the permanent jobs
indicator.

London, the Midlands and the North all registered lower placement
volumes during the latest survey period, with only the South bucking the
trend by posting growth, KPMG/REC said.

In terms of the temporary indicator, KPMG/REC said that client cost
cutting, the additional bank holidays around the Jubilee and, in some
cases, effects relating to the Agency Worker Regulations were the
reasons behind the drop in billings.

The report also shows that there was a slower rise in demand for
staff in June. At 53.0, down from 53.4 in May, the Report on Jobs
Vacancy Index was at its lowest level for five months.

Commenting on the data, Recruitment and Employment Confederation
chief executive Kevin Green said that the sharp drop in the number of
people placed into work last month was “really disappointing.”

“A decrease in hiring activity means we could see a period of
increased unemployment, especially as a new wave of school leavers and
graduates will be entering the labour market over the summer,” he said.

“The UK labour market has been remarkably resilient throughout the
downturn and our slow economic recovery. However, employer confidence is
fragile and it’s not that surprising that under the weight of the
Eurozone crisis and other bad news placements fell in June,” he added.

–London newsroom 4420 7862 7492; email: ukeditorial@marketnews.com

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