Recruitment agencies participating in the latest Markit/REC Report on Jobs survey report that billings for temporary/contracting placements rose at their sharpest rate in four months during March.

While placements for Umbrella Company Employees and other temporary/contracting staff appears to have quickened significantly, the rate of growth for permanent placements eased appreciably, falling to its lowest pace in six months.

The data reveals a softening in demand for staff, with overall growth in vacancy numbers slowing to its lowest rate in 33 months. This was true of both permanent and temporary/contracting staff.

These trends converge with another: the continuing deterioration in candidate availability, which worsened further during March. The availability of permanent candidates fell at a slightly sharper rate than the decline seen in February, while temporary/contracting candidate availability declined at the slowest pace in 30 months.

March saw starting salaries for permanent staff continue to rise at a strong pace, quickening modestly on February’s rate. Hourly pay rates for contracting and other temporary workers, meanwhile, rose at the fastest pace in three months.

The growth in temporary/contracting billings was evenly spread across all four of the English regions monitored in the survey, although the Midlands reported the sharpest rise. Permanent placements, too, rose in each of the English regions, with London posting the slowest increase and the North posting the fastest.

In line with previous trends, the survey found that demand for staff was greatest in the private sector, with public sector placements actually declining again in March.

For contracting and other temporary workers, demand rose across all nine of the sectors monitored in the survey. Nursing/Medical/Care came out on top, while Engineering came in at the bottom of the temp demand league table.

The REC’s Director of Policy, Tom Hadley, acknowledged that while the last quarter had seen permanent hiring continuing to grow, the rate had slowed to its lowest level since September last year. Although the REC expects to see an overall continuation of jobs growth, he said, marketplace uncertainty was now having a visible impact on UK employment.

He added: “Global economic headwinds plus uncertainty around a possible Brexit make it likely that slower growth in permanent hiring will remain over the next few months as employers take a wait-and-see approach.

“In contrast, temporary hiring is on the up as businesses seek to meet increasing demand while retaining the ability to react quickly to any threats that might be around the corner.

“We have also seen a continuing increase in both starting salaries for permanent positions and hourly rates for temporary employment – a trend likely linked to the introduction of the National Living Wage.”

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