South: Report on Jobs shows strongest demand for permanent staff since 1998, says KPMG

The demand for permanent staff in the south rose in August, extending the current sequence of growth to exactly five years, according to The Report on Jobs: South*, which contains original data from the survey of recruitment and employment consultants in the south of England (excluding London). Moreover, the rate of expansion in demand was the fastest since March 1998, and stronger than all other English regions surveyed. Similarly, demand for temp staff increased at the strongest rate since June 1998.

Permanent placement growth strongest since January

Recruitment agencies in the south reported the strongest rise in permanent staff placements since the start of the year in August. Moreover, the rate of growth was the third-fastest in the survey's history. Strong expansions in permanent staff appointments were registered in each of the four monitored English regions in August, although the UK average deteriorated slightly from July. The sharpest rise was noted in the south, while the pace of growth was weakest in the Midlands.

Andrew Morgan, office senior partner at KPMG in the Thames Valley, said: “Businesses in the south are investing heavily in their workforces, out-hiring all other regions in the UK and building their workforces back up to deliver their growth plans. This spending spree is a strong indicator that businesses in our region feel confident about the future and are thus prepared to plough back the profits from their business into their workforce.

“This growth in employee numbers could also help to further energise the commercial property market in the Thames Valley: growing businesses will need more space to accommodate their burgeoning workforce.”

New temporary staff placements rise

The number of newly-placed temporary staff in the south rose for the 16th successive month in August. The rate of growth remained sharp overall, but slowed for the second month running from June’s 163-month record to the weakest since February. Similarly, temp billings rose solidly across the UK for a 16th successive month in August, although the overall rate of growth dipped slightly from July.

Record decline in permanent staff availability

The availability of permanent candidates in the south’s labour market declined for the 14th consecutive month in August. Moreover, the rate of contraction was the fastest since the survey began in October 1997. Permanent staff availability in the UK as a whole continued to decline at a marked pace in August, extending the current period of deteriorating supply to 16 months. Candidate availability fell quickest in the Midlands.

Temporary staff availability down

The supply of candidates for temporary positions in the south fell for the 12th consecutive month in August. Moreover, the rate of contraction was the fastest since May 1998. Similarly, temporary candidate availability fell sharply across the remaining three English regions in August, albeit at weaker rates.

Permanent salary growth close to survey record

The rate of salary inflation for newly-placed permanent staff in the south accelerated further in August, almost matching the survey record set in April 1998. Permanent salaries across the UK as a whole rose for the 28th month running in August. Furthermore, the pace of salary growth remained close to the survey record observed in June. By region, wages increased quickest in the south.

Temporary staff wages rise

Temp pay growth in the south accelerated in August, and almost matched June’s 80-month peak. Wages for temporary staff have risen every month since April 2012. That said, the rate of inflation remained slower than the UK average in the latest period. Temp pay growth was evident in each of the four English regions in August, as wage inflation accelerated to the joint-quickest rate since November 2007. Temp rates rose fastest in the north, followed by the Midlands, the south and London.

* 'The Report on Jobs: South' is designed to provide a comprehensive and up-to-date guide to labour market trends and the data is directly comparable with the 'UK Report on Jobs'.