Economic uncertainty and cautious hiring dampens recruitment activity

Economic uncertainty and more cautious hiring policies dampened recruitment activity in the South of England during July.

According to the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, permanent staff appointments fell at the sharpest pace in just over three years while there was a fresh contraction in temp billings.

Reports of redundancies as well as a general slowdown in hiring activity meanwhile drove further steep increases in the supply of both permanent and temporary staff.

However, pay pressures picked up slightly, as the rising cost of living and competition for specific skills pushed up starting salaries and temp wages.

Meanwhile, both permanent and temporary vacancies expanded at slower rates.

David Williams, office senior partner at KPMG in Bristol, said: “The jobs market across the South, including the South West of England, is going through a rough period and this reflects the challenging trading conditions that business leaders face.

“Rising interest rates, persistent inflation and an uncertain economic outlook are sapping the confidence of employers to recruit and pursue their growth plans. Instead, efforts are more likely to be focused on retaining staff, managing their margins and considering how to plug short term gaps in resource.

“That said, businesses in our region will be encouraged by the increasing availability of candidates. We could see this put a break on high wage and salary inflation, but also provide greater choice when hires need to be made. Unfortunately, for those looking for work, the trends we’re seeing point to greater competition in the market for a shrinking number of available opportunities.”