Growth of permanent placements eases to slowest since May 2013

The Report on Jobs: North contains original data from the survey of recruitment and employment consultants in the North of England. The report is designed to provide a comprehensive and up-to-date guide to labour market trends and the data are directly comparable with the UK Report on Jobs.

Despite remaining strong overall, growth of demand for permanent staff in the North eased to the slowest in a year-and-a-half and remained below the UK average in December. Conversely, temporary vacancies rose at a faster pace during the month, with the respective index for the North posting above the UK-wide trend.

The number of staff placed in permanent positions in the North continued to rise in December, extending the current sequence of expansion to 20 months. However, the rate of growth eased to the weakest in more than a year-and-a-half and was the least marked among the monitored English regions.

Growth of permanent placements across the UK as a whole accelerated from November’s 18-month low in December. The latest rise in staff appointments was the twenty-seventh in as many months and robust overall. The pace of expansion was quickest in the South, followed by the Midlands.

In contrast, recruitment consultants in the North reported the fastest growth of temp billings among all four regions surveyed in December.

Moreover, the latest increase was the twenty-ninth in as many months and the quickest since September. Temp billings across the UK also rose at a faster pace in December, marking a 20-month period of expansion.

The rate of growth picked up in all four monitored regions apart from the Midlands.

December data highlighted a slower reduction in permanent staff availability in the North of England. The rate of decline was the weakest in eight months. Nonetheless, almost one-third of survey respondents signalled a contraction in permanent staff supply in comparison with the previous month.

The supply of permanent staff in the UK fell for the twentieth consecutive month in December, albeit at the slowest pace since April. London was the only region to register a faster contraction, while the least pronounced reduction was observed in the North for the second month in a row.

Continuing the trend observed throughout the past 15 months, temp supply in the North deteriorated in December. That said, the pace of reduction was little-changed since November and slower than the average observed for 2014.

Recruitment consultants across the UK as a whole signalled a sharper decline in temp supply in December. The rate of contraction slowed substantially in the Midlands, contrasting with steeper reductions reported elsewhere.

Temp pay growth sharpest among English regions surveyed for second straight month

Temp pay growth was evident in the North for the twenty-eighth month running in December. The rate of increase accelerated further during the month to the sharpest since August.

Exactly one-fifth of survey participants registered higher temp rates, compared with around 1% that noted a fall. Likewise, temp pay growth was evident at the UK level for the twenty-third month in a row in December.

Temp rates rose at faster rates in each of the monitored English regions during the month, with the quickest increase again recorded in the North.

The latest recruitment industry survey signalled further permanent salary growth in the North in December, extending the current sequence of rises to 34 months.

Despite slowing from the prior month, the rate of wage inflation remained above the average seen at the UK level for the second month in a row. Continuing the trend observed throughout the past 32 months, permanent salaries increased in December.

The rate of wage inflation was little-changed across the UK on average and remained marked in each of the four regions surveyed. Salary growth was strongest in the Midlands for the fourth straight month.

Office Senior Partner at KPMG in Newcastle, Mick Thompson, said: “It was a December of two halves for the Northern jobs market.

“Growth in permanent roles weakened and lagged the rest of the UK, while festive demand triggered a dramatic upswing in temporary roles as organisations searched for help in an effort to fulfil customer orders.

“With potential festive anomalies behind us, the next couple of months should indicate whether Northern businesses have made recruitment resolutions that stand to benefit the economy.”