Demand for permanent staff fell for first time in five years during June

Juneís Report on Jobs, from the Recruitment and Employment Confederation and KPMG, signalled a further weakening of UK job market conditions. Permanent placements continued to fall and temp billings rose at the weakest pace in five months as firmsí demand for staff contracted for the first time in five years. Inflation of wages and salaries accelerated despite a strong rise in candidate availability.

The Report on Jobs, published today by the REC and KPMG, provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies and employers.

Kevin Green, Chief Executive of the REC said of the Report: ìThis is the first major sign that a slowing economy is starting to have an impact on jobs. The decline in the demand for permanent staff for the first time in five years indicates that employers are hesitating before making recruitment decisions.

ìThe continuous growth of temporary recruitment shows that this is being used to meet peaks and troughs in business workloads. We anticipate that in this worsening economic climate, businesses will go to great lengths to retain the staff that they have worked hard to acquire in the last few years.

Itís also vital that jobseekers keep in mind that there are still numerous positions to fill and recruitment agencies will be working hard to search for the right talent to meet employersí needs.î

Alan Nolan, Director at KPMG comments:
ìThis really is a sobering set of figures proving the credit crunch has finally taken its toll and is now severely weakening the UK jobs market. Many employers now seem to be accepting the inevitable - they will have to cut costs by laying off people because their businesses won't be growing as much as they could have expected a couple of months ago. We already have seen widespread redundancy programmes in the City and among housebuilders and there are more to come. Even the usually robust temporary jobs market is coming under pressure, adding to the likelihood of a stagnant jobs market and rising unemployment for the foreseeable future.î