Decline in permanent placements across North West eases, but remains marked

Recruiters across the region recorded another marked decrease in permanent staff appointments at the start of the third quarter.

That said, the rate of reduction eased to the softest in the current five-month sequence of decline.

This was among the findings of the latest KPMG and REC, UK Report on Jobs: North of England survey.

Anecdotal evidence suggested that employers were continuing to focus on cost cutting rather than making new hires.

Across the UK as a whole, permanent placements also fell for the fifth month in succession, as COVID-19-related restrictions continued to stifle hiring activity.

The rate of contraction was the softest in the aforementioned sequence, but still strong.

Across the four monitored English regions the reduction was broad based and led by London.

The slowest decline was reported in the Midlands.

July data pointed to a rise in temporary billings across the patch.

Although the rate of growth was only marginal, the result represented the first increase since February.

When explaining the upturn, recruiters mentioned slightly stronger demand for engineers, construction workers and warehouse staff.

At the national level, temporary staff billings declined further, extending the current sequence of reduction to seven months.

The latest drop was the softest since February, albeit solid overall.

There was some divergence at the regional level, with the Midlands and North of England registering a modest uptick, while the South of England and London continued to record contractions.

Demand for both permanent and temporary staff across the North West continued to deteriorate in July.

Recruiters saw another marked reduction in permanent vacancies, extending the current run of decline that began in March.

Moreover, the pace of contraction was faster than at the national level for the fourth month in a row.

Demand for temporary staff also continued to decline. However, the rate of decrease was the softest for four months and modest overall.

Jennifer Lee, head of KPMG’s Liverpool office, said: “With the softest rates of decline seen for five months, it’s encouraging to see the downturn in recruitment easing across the North West as parts of the economy reopen.

“However, we are still a long way from being out of the woods, with hiring plans remaining on ice and the uncertain outlook – compounded in part by concerns around a possible second wave of the virus and the reintroduction of lockdown measures across parts of the region – still weighing heavily on business’s recruitment decisions.

“As the furlough scheme unwinds, unemployment is likely to rise further, proving both an opportunity and challenge for government to create training and skills programmes for jobseekers – and help bring confidence back to our regional workforce.”

Neil Carberry, REC chief executive, said: “While permanent placements still decreased last month, the pace of decline has slowed hugely as the tide turned on lockdown.

“With the economy opening up through June and July we would expect an improving trend in the coming months as firms recover from the worst of the crisis.

“The fact that temp billings rose in the North and demand is now increasing for temporary blue collar and construction workers is also a good sign.

“There are far fewer vacancies in the market than before March, and more people looking for jobs.

“Recruiters will be key to helping people build confidence and find work – but the reality is that government needs to help kickstart hiring.

“Reducing employers’ National Insurance rates would cut the cost of hiring, and a good Brexit trade deal will also support stronger business confidence and investment.”

The report, which is compiled by IHS Markit, is based on responses to questionnaires sent to around 100 recruitment and employment consultancies in the North of England.