First increase in permanent placements since February

The latest KPMG and REC, UK Report on Jobs: North of England survey has signalled a return to growth of permanent placements in September.

It joins temp billings in expansion territory as a gradual reopening of the economy following the coronavirus lockdown continued.

That said, ongoing redundancies related to the pandemic meant that candidate availability rose sharply again at the end of the third quarter.

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.

The North saw permanent staff placements return to growth during September, thereby ending a six-month sequence of contraction.

Recruitment firms indicated that there were signs of companies being more prepared to hire following a reopening of the economy.

The rise in permanent placements in the region was slightly slower than the UK average.

At the regional level, the Midlands registered the quickest increase in permanent staff appointments, followed by the South of England.

Elsewhere, London recorded a further contraction, albeit one that was only mild.

September data pointed to a third successive monthly increase in temp billings in the North.

Moreover, the rate of expansion continued to accelerate, reaching the fastest since October 2018.

The rise in the North was also sharper than the UK average.

Where temp billings increased, respondents mentioned improving demand for staff as some parts of the economy returned to normal following the easing of COVID-19 restrictions.

As was the case for permanent placements, the Midlands registered the fastest rise in temp billings across the four monitored English regions, while London was the only area to record a fall.

Recruiters in the North of England saw demand for temporary staff improve for the first time in seven months during September.

The marked increase was faster than the UK average. On the other hand, vacancies for permanent roles continued to fall.

That said, the decline was much softer than that seen in August and the weakest in the current seven-month sequence of reduction. The fall in demand in the North of England compared with a slight rise across the UK as a whole.

Although the rate of increase in permanent candidates eased from the record pace seen in August, the rise in availability remained substantial at the end of the third quarter.

According to respondents, redundancies was the principal factor leading to higher candidate numbers. The rise in the North was the softest of the four monitored English regions. The Midlands saw the most marked rise in permanent candidate availability.

The number of candidates for temporary positions continued to increase sharply during September, extending the current sequence of expansion to eight months.

However, the latest rise was the slowest since March and the weakest of the four English regions.

As was the case with regards to permanent labour supply, the increase in temporary staff availability was widely linked to redundancies as a result of the COVID-19 pandemic. At the regional level, London registered the fastest increase in temp staff supply in September.

As has been the case in each of the past six months, permanent starting salaries in the North of England decreased in September.

The solid reduction was faster than that seen in the previous month, although the fall in salaries in the North was the slowest of the four English regions covered by the survey. London saw the steepest drop in permanent salaries.

Recruiters in the North of England signalled an increase in wages for temporary staff during September, thereby ending a six-month sequence of decline.

The rise in the North contrasted with a fall across the UK as a whole. The rate of pay inflation was slight, and below the series average.

Elsewhere, temp wages were broadly stable in the Midlands. Meanwhile, the South of England saw a slight fall and London recorded a further marked drop in temp pay.

Warren Middleton, office senior partner for KPMG in Manchester, said: “While it’s encouraging to see recovery in hiring activity, with growth in permanent staff appointments for the first time in seven months, it’s concerning to see another rapid rise in candidate availability.

“With increasing unease over what will happen in the coming months with the pandemic, Brexit and with the end of the furlough scheme in sight, the uncertainty for UK business is not going to dissipate anytime soon.

“The Government has got challenging times ahead to continue to offer adequate support to business, opportunities for jobs seekers to upskill while helping instil confidence in the workforce of the region.”

Neil Carberry, chief executive of the REC, said: “Growing permanent placements and temp billings in September confirm the positive trend recruiters around the country have been reporting to the REC.

“Given the scale of falls in demand during the lockdown, we would expect a return to positive territory at this stage as demand for staff recovers. But it is great to see it happen.

“Across the country the story varies between sectors, but today’s survey emphasises the fact that the labour market is always creating roles – our challenge is to help people to find them.”