Job market continues to contract


Demand from employers for both permanent and temporary staff is continuing to contract, with no sign of a post-Iraq bounce rescuing the labour market.

The latest Report on Jobs by Deloitte and Touche and the Recruitment and Employment Confederation (REC) showed a decline in staff billings for the third consecutive month in May, and at sharper rates than in April. The survey draws on data provided by recruitment consultancies and employers, as well as data on national newspaper recruitment advertising

Employers were generally reported to have been holding off on the recruitment of additional staff whilst business conditions remained uncertain.

Employment prospects have fallen in every sector except construction., with demand for staff in manufacturing falling for the forty-third month in a row. The figures also pointed to a decline in private sector staffing levels for the twenty-fourth successive month in May. However, with fewer job losses in the service sector, the rate of job shedding eased slightly for the second month running to the slowest since January.

The rate of decline of demand for staff was only slightly less marked than April’s seventeen-month record rate. Demand for permanent staff remained particularly weak, with only Nursing/Medical and Hotel/Catering staff seeing any significant improvement in demand.

As has been the case since June 2001, the overall availability of staff to fill vacant positions at employers was again found to have improved in May. Indeed, the rate of improvement picked up to the second fastest since last October.

According to Brett Walsh, Head of UK Human Capital at Deloitte & Touche, "May’s Report on Jobs provides firm evidence of the absence of a post-Iraq bounce in the labour market. Permanent staff placements and temporary staff billings in fact fell at increased rates.

“The renewed weakness of the labour market reflected widespread business uncertainty for employers. Meanwhile, those employers recruiting staff remained in a strong position, with availability of candidates improving and many accepting lower wages and salaries in order to secure employment."