Britain's jobs market cools in June

2005

Demand for staff in Britain showed signs of cooling last month, with the rate of increase in permanent jobs the weakest seen for three months and firmly below the level of much of last year.

The latest Recruitment and Employment Confederation (REC) / Deloitte Report on Jobs shows that overall employment continued to rise in June, although the demand for staff grew at a reduced pace.

Difficulties filling vacant positions were less widespread than in previous months, which in turn led to an easing of pay inflation.

"Employers will be relieved to see that recent difficulties with candidate availability are less widespread and salary growth is easing," said Deloitte's Ashley Unwin.

"However, as proven by previous host cities, the Olympics generate opportunities across the entire job market and we would expect to see a major strengthening of private sector employment, particularly in the hotel & catering industry."

Meanwhile, the Research Employment Index, which is based on the Purchasing Managers' Index surveys, signalled further growth of private sector staffing levels in June, although the rate of growth remained only modest and below that seen throughout last year.

Weak employment growth primarily reflected a further decline in the manufacturing workforce, the figures suggested.

Two other indicators point to a peaking in growth of demand for staff. First, national press recruitment advertising in the UK was down 8.1% on a year earlier in May - the sharpest rate of decline for over two years. Second, the government's measure of job vacancies rose by just 4.1% in May - a 15-month low.

But the REC's Marcia Roberts insisted that Britain's jobs market was still very positive.

"With the UK taking over the presidency of the EU, this month's report provides a timely reminder that the UK has one of the best performing labour markets in Europe," she said.

"As a result, it is crucial for the UK Government to continue fighting against potentially damaging legislation such as the current draft of the Agency Workers Directive and to highlight the need for the EU to focus on job creation and competitiveness."

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