UK labour market conditions continue to deteriorate in November
The KPMG and Recruitment and Employment Confederation's, UK Report on Jobs survey, compiled by S&P Global, pointed to a further deterioration of British labour market conditions during November.
Permanent placements continued to decline, down from -5.9 in October to -9.3 - the steepest pace seen since August 2023 as firms signalled reduced demand for staff. Temporary billings increased modestly from -3.2 to 2-2.7.
Recruitment consultants pointed to multiple instances of employers reassessing staffing levels and halting recruitment activity as they considered the impact of the late October government Budget on business performance.
As a result, permanent salary growth remained modest and was little changed from October's 44-month low, while demand for staff declined at the fastest pace since August 2020 and overall staff availability continued to rise amid an increase in reported redundancies.
The largest decline in permanent placements was seen in the south of England, followed by the north of England and apart from a marked rise in the Midlands, the reduction in temp billings was broad-based.
KPMG's Jon Holt said: " “Businesses are having to weigh up the prospect of increasing employee costs following the Budget, which has led to an accelerated slowdown in hiring activity across the board. While the data was already heading in that direction, permanent placements saw their steepest reductions in over a year last month, and temporary roles also saw a fifth consecutive decline.
“This slowdown, alongside a growing availability of candidates in the market could put more downward pressure on wage inflation, which remained largely unchanged on last month’s 44-month low. This trend will be encouraging for the Bank’s monetary policy committee ahead of the next meeting later this month, although it may not be enough to counter wider inflationary pressures we are seeing in the economy.
“However, the prospect of further rate cuts through 2025, alongside the Government’s investment plans, both point to improved growth in the near term. This should give businesses greater confidence which may help stabilise the labour market.”
Reporting by Iain Gilbert at Sharecast.com