Employers still cautious as Northern jobs market shows little change

The jobs market showed little change across the North during August, new data from the latest KPMG and REC, UK Report shows.

The survey revealed little change in hiring activity for permanent staff and only a marginal uplift in workers placed into temporary roles.

Elsewhere, the combination of slower vacancy growth and historically elevated increases in staff supply led to a cooling of pay pressures in August. 

The KPMG and REC, UK Report on Jobs: North of England is compiled by S&P Global from responses to questionnaires sent to around 150 recruitment and employment consultancies in the North of England.

The report showed that, amid reports of reduced demand, the number of staff placed into permanent roles in the North of England decreased again in August.

As the respective seasonally adjusted index neared the crucial 50.0 mark, the decline in permanent staff appointments that was signalled was only fractional and the least pronounced in the current 14-month sequence.

Some recruiters reportedly received a greater number of enquires in August. The North of England posted the softest drop in permanent placements of all four monitored regions.

Recruitment agencies in the North of England posted a fourth straight month-on-month increase in temp billings in August. According to surveyed consultancies, there was an uplift in demand for short term workers.

That said, the increase was only marginal, having slowed to the weakest across the current growth period. Only the Midlands posted a faster rise in temp billings than that seen locally.

For both types of roles, the North of England continued to register the fastest vacancy growth of the four monitored regions.

August data highlighted a sixth successive monthly rise in the number of permanent job openings. However, the rate of increase was the slowest since April.

Vacancies for temporary roles increased for a fifth month running in August. Here, the rate of growth eased to a three-month low and was moderate overall.

As has been the case since the start of the year, there was another marked boost to permanent staff availability across the North of England in August.

Recruiters blamed the rise on challenging labour market conditions, with some noting a pick up in redundancies. Though still robust, the rate of expansion was the slowest for six months.

The local increase in permanent staff availability was fractionally faster than the UK average in August.

The latest survey data pointed to a further improvement in temporary staff supply in August, thereby extending the current run of growth to exactly a year-and-a-half.

Recruiters linked the latest increase to greater demand for temporary roles. Though marked, the uplift was the least pronounced since April. The latest increase in supply across the North of England was also slower than the UK average.

The seasonally adjusted Permanent Salaries Index posted above the 50.0 no-change mark again in August, to signal three-and-a-half years of starting pay growth in the North of England.

Some recruiters linked the rise in permanent starting salaries to an increase in senior roles.

The rate of inflation was strong, but the softest seen since March and below its historical average, although the increase in the North of England was the strongest of the four regions monitored by the survey.

Recruiters in the North of England recorded sustained growth in pay for temporary workers in August. The increase marked the ninth increase in hourly wages in as many months.

However, the rate of temp pay inflation was the softest in the current run of growth having cooled for the third month in a row. Nevertheless, the local rise in temporary wages was the fastest of the monitored English regional for a seventh successive month.

Chris Stott

Chris Stott, Office Senior Partner for KPMG Manchester, said: “While summer months can see a pause in some hiring, the employment market in the North of England continued to mirror the UK-wide pattern in August of permanent hiring slowing, but the region did see temporary hiring increase. 

“The North did, however, see only a slight decline in permanent staff appointments, faring better than other UK regions, while only the Midlands saw a greater rise in temporary postings during August.

“As the holiday season ends and the country begins to look towards the Budget, hopefully September creates further business confidence and employment opportunities in the North of England.”

Neil Carberry, REC Chief Executive, said: “August is always a difficult market to judge because of the summer break, but this month’s survey supports what we have been hearing around the country – employers are still cautious. They are waiting for a clear signal that sustained demand is around the corner.

“The new government said growth was its main priority – but it needs to deliver now. A vision for a positive, prosperous Britain has to accompany the fiscal realism that is being served up right now. That is the test for the Chancellor and Prime Minister this autumn.”