South: Permanent placements growth strengthens further, reports KPMG
The south of England bucks the national trend of slowing growth in permanent job placements, according to The Report on Jobs: South*. However, the region continues to lag in terms of temp billings, and salary and wage pressures remain strong.
The Report contains original data from the survey of recruitment and employment consultants in the south of England (excluding London), and is designed to provide a comprehensive and up-to-date guide to labour market trends. The data are directly comparable with the UK Report on Jobs.
Permanent placements growth at eight-month high in December
Recruitment agencies in the south reported a marked rise in full-time appointments in December. The rate of growth accelerated further from September’s muted pace, to the fastest since April. The south also led the four English regions in terms of permanent placements growth.
UK jobs data for December pointed to a broad-based increase in permanent staff placements, with growth once again noted across the four monitored English regions. That said, the north, the Midlands and London all saw slower rates of growth in the latest period.
The volume of people placed in temporary jobs in the south rose at the slowest pace in three months in December. The rate of expansion was also below the UK average, but remained solid overall.
For the 32nd month running, temp billings rose in all four tracked regions. The Midlands led the expansion in 11 months of 2015, the exception being in May, when it shared first place in the rankings with London.
Demand for permanent staff in the south rose at the fastest pace since May, and at a stronger rate than the UK average – as has been the case throughout the second half of 2015. Growth of temp demand also outpaced the UK trend in December, hitting an eight-month record.
Decline in permanent candidate supply remains substantial
The availability of labour for permanent roles in the south fell sharply in December. The rate of decline eased from November, but remained steeper than the trend shown over 2015 as a whole.
The number of applicants seeking permanent jobs in the UK decreased further in December, with sharp declines noted in all four monitored English regions. The fastest rate of contraction was seen in the Midlands and the slowest in the North.
The rate of decline in the supply of temporary staff in the south slowed from November’s near-record pace. That said, it remained marked overall, and stronger than the average seen over 2015 as a whole.
Temp supply also decreased across the three remaining tracked regions. Rates of reduction moderated in London and the north, whereas an acceleration was noted in the Midlands. Temp/contract staff availability across the UK labour market as a whole dropped for the 30th month running.
Salary pressures remain strong
Inflation of salaries awarded to new full-time staff in the south remained strong in December, despite easing from November’s seven-month peak. Moreover, the south registered the fastest rise among the English regions in the latest period, just ahead of the Midlands.
Pay pressures in the UK economy as a whole showed signs of abating, as softer increases in permanent salaries across the four monitored English regions led the overall rate of UK salary inflation to reach a 26-month low.
Inflation of starting temp pay rates in the south remained strong in December, both in the context of the survey history and the latest UK figure. That said, it slowed from November’s five-month high to the weakest since January.
Temp pay rates at the UK level also rose at a weaker pace, with slower increases also recorded in London and the Midlands. The north was the only region to register a stronger rate of wage inflation.
Andrew Morgan, office senior partner for KPMG in Reading, said: “The south bucked the national trend in December with demand for permanent staff rising at the fastest pace since May, and at a stronger rate than the UK average. This was reflected in a marked rise in full-time appointments in December, which rose at the strongest rate for eight months.
“Despite an increase in permanent placements, there was a continued lack of available skilled labour for both permanent and temporary roles, with the number of applicants seeking permanent jobs in the UK decreasing further in December. The rate of decline in available labour for both temporary and permanent roles eased from November’s peak.
“Interestingly for the first time in months, the construction and engineering sectors were not cited as having a skills shortage, which could be good news for local building projects. Instead, as companies are investing heavily in their cyber security teams, the demand for IT specialists surged in December. This hiring boom has caused a skills shortage in the sector, with recruiters struggling to find enough candidates qualified in IT security to satisfy demand.
“Employees in the south will be looking forward to payday with inflation of salaries among permanent employees remaining strong over December. The region also registered the fastest rise compared to the rest of the country for the latest period. This could signal possible pay pressures for employers at the start of 2016 as businesses boost wages to remain attractive employers.”
* The Report on Jobs: South of England is based on data compiled from monthly replies to questionnaires sent to around 150 recruitment and employment consultancies across the east, South East and South West of England. The consultancies are drawn from Markit’s UK Report on Jobs panel.
