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Fastest decline in job vacancies for 7 years
October 2008
Jobless total rises for sixth month – Shops and hotels sector down 18%
Demand for staff last month fell at the fastest rate for almost seven years as the outlook for jobs continued to falter, according to a survey of recruitment companies.
The study by the Recruitment and Employment Confederation (REC) and consultant KPMG reported that appointments of permanent staff had fallen at the fastest rate since November 2001. Billings for temporary staff had fallen for the first time since May 2003.
According to last month’s official figures, the number of people claiming unemployment benefit has risen in each of the previous six months, increasing in July at the fastest rate since 1992.
The total number of people out of work rose by 60,000 to 1.67m during the three months to the end of June. Although the numbers are still low by historical standards they are expected to rise in the coming months as the impact of redundancies announced in the financial and building sectors start to work through into other areas of the economy.
REC/KPMG’’s job vacancy index has fallen to its lowest level since December 2001. The findings mirror official figures reporting that vacancies in July fell for the first time in almost two years.
REC/KPMG said: “While the first wave of job losses has been centred on construction, reflecting the housing market downturn, there is increasing evidence that other sectors are also set to see significant cutbacks. Recent surveys of purchasing managers in both manufacturing and services have signalled falling levels of employment, as firms struggle under the weight of slowing demand and elevated cost inflationary pressures.”
According to government figures, vacancies in the shops, hotels and restaurants sector, including wholesalers, fell by almost 18 per cent during the three months to the end of July. Construction vacancies were down 12.6 per cent and finance and business services by 9.9 per cent.
Kevin Green, REC chief executive, said: “The deteriorating economy is now having the expected negative impact on the labour market. The demand for both permanent and temporary workers is weakening, although it must be remembered that this follows a period of unprecedented high demand for staff.”
Increasing business uncertainty, according to REC/KPMG, had “in some cases resulted in recruitment decisions being put on hold.”
Nursing and medical care was the only employment sector to register an increase in permanent appointments last month, it said. The biggest fall in demand was for hotel and catering workers.
Alan Nolan, KPMG Director, said: The slide in the UK economy continues to hit the jobs market hard – with yet another sharp drop in recruitment. UK employers are continuing to control payroll costs through redundancies.”
Source: Andrew Taylor, Financial Times 3 September 2008
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