The latest
Amid reports of hiring freezes and cost cutting at clients, recruitment consultants signalled another marked decline in permanent placements as well as the steepest contraction in temp billings since
Latest data signalled a fifth consecutive monthly decline in the demand for staff, with the rate of contraction only slightly slower than February's 37-month record. With demand falling, and evidence of a greater number of redundancies, overall candidate supply increased at the steepest pace for four months. This weighed on pay growth. Starting salaries rose at their slowest rate for over three years, whilst temporary wage inflation eased to a four-month low.
The report is compiled by
Recruitment activity continues to decline in March
Permanent staff appointments in the
Permanent Placements Index
Temporary Billings
50.0 = no-change
graph
Permanent staff pay growth lowest in over three years
Starting pay levels for both permanent and temporary workers continued to increase during March. Higher pay generally reflected efforts to attract better candidates. However, amid an upturn in candidate supply, rates of pay growth continued to slide. Overall, permanent staff salaries rose at the weakest rate in over three years, whilst for temp wages the increase was the slowest in four months. In both instances, growth rates were also below their respective survey trends.
Further decline in staff demand signalled
Latest data showed that demand for all workers fell for a fifth successive month in March. Although the rate of contraction was softer than in February, it remained historically marked. Permanent staff demand continued to fall at a noticeably faster rate than for temp workers, which again fell only marginally.
March saw a rapid and accelerated increase in the availability of staff. Latest data marked the thirteenth successive month that growth has been registered, and the latest rise was the steepest recorded since last November. Higher volumes of redundancies and cost cutting at firms reportedly led to an increase in candidate availability. Permanent and temporary staff availability both increased sharply.
Regional and Sector Variations
There were reductions in the number of permanent placements across all four monitored English regions in the latest survey period. The sharpest contraction was recorded in the South of
The downturn in temporary billings was common across all four English regions, with the steepest decline recorded for
In March, eight out of ten broad sectors covered by the survey experienced a drop in demand for permanent vacancies, the exceptions being Engineering and Blue Collar. The sharpest fall in demand was recorded in the Retail category, followed by IT & Computing.
Temporary vacancies increased for Blue Collar, Engineering and
Comments
Commenting on the latest survey results,
'Persistent economic uncertainty has led to many business leaders delaying major investment decisions and relying on savings for growth during the first quarter of the year. But they are optimistic about the outlook improving.
'And while March's survey data indicates ongoing weak demand in the labour market with a sharp rise in candidate availability, relatively low levels of
'There are still headwinds, but it's time for the
'Economic growth has been sidelined for too long and must be at the heart of this year's General Election campaign. Today's data shows the economy in a holding pattern waiting for inflation and interest rates to ease, so that firms can get to investing. The decline in permanent placements has been steady for some months now, with temporary recruitment still robust, if falling back from the record highs of 2022/3. Employers appear to be leaning on temporary work while they are uncertain about the path of the economy.
'The data here should support a decision by the
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Methodology
The
Survey responses are collected in the second half of each month and indicate the direction of change compared to the previous month. A diffusion index is calculated for each survey variable. The index is the sum of the percentage of 'higher' responses and half the percentage of 'unchanged' responses. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The indices are then seasonally adjusted.
Underlying survey data are not revised after publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series.
For further information on the survey methodology, please contact economics@spglobal.com.
Full reports and historical data from the
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