Signs of jobs market jitters as manufacturing hits the buffers


April was one of the worst months for British Industry in recent years as new figures show the manufacturing sector struggling with largest drop in staffing levels for two years.

As the collapse of MG Rover, imminent job losses at Marconi & IBM, and ABN-Amro's prediction of a 500,000 redundancies over the next three years have all highlighted, Britain's fragile job market is under threat.

Now figure compiled for the Report on Jobs, published by the Recruitment and Employment Confederation (REC) and Deloitte, has confirmed the scale of the slow-down in manufacturing and hinted at knock-on effects elsewhere.

"In the past two years the UK job market has performed strongly and the demand for staff is continuing to rise," said Marcia Roberts, deputy chief executive at the REC.

"However, we are starting to see the early signs that this demand is beginning to plateau, in particular across the temporary sector.

"In April we also witnessed the sharpest drop in manufacturing sector staffing levels for two years. The recent redundancies in the sector and their knock on effects highlight the sensitivities of the UK jobs market," she added.

Overall, however, the figures indicated a strong rate of improvement in demand for staff in April, despite falling slightly to its lowest level in sixteen months.

Growth of demand for permanent staff remained sharper than for temp staff. Seven categories of permanent staff recorded improvements in demand, led by Hotel & Catering staff.

Actual private sector staffing levels continued to rise at a moderate pace in April, while the overall availability of candidates to fill positions at employers was down sharply, with a number of key skill-sets were still in short supply.

However, the rate of deterioration in candidate availability eased to the slowest in fourteen months. Permanent staff availability again fell at a more marked rate than temp availability.

Strong demand for staff and shortages of suitable candidates also contributed to a further round of strong pay inflation in April.

However national press recruitment advertising in the UK was down 8.3 per cent on the same period a year earlier in March, the sharpest annual rate of decline in over two years.

"We are entering a crucial period for the UK labour market and the new Labour cabinet should think very carefully before implementing any new legislation that may restrict employment creation and damage the job market," Marcia Roberts said.

"UK business needs the Government to fight its corner in Brussels, particularly on key European employment legislation such as the Agency Workers Directive and the Working Time Directive."