The latest Report on Jobs from the Recruitment and Employment Confederation and KPMG suggests that the tail off in temporary billings – the average PAYE umbrella contractor’s bread and butter – is turning from a blip into a trend.

In May permanent recruitment rose modestly, but at its weakest rate in five months, while temporary/contract billings took a significant tumble, not only falling for the sixth consecutive month but plunging at the fastest rate since July 2009. Overall, demand for new staff in May rose at its slowest rate in four months, with weaker growth in vacancies for both permanent and temporary/contractor staff.

Contractors working through umbrella companies in the IT skills market also saw their opportunities squeezed, as demand fell from April’s figure of 53.5 to last month’s 49.2. Wind the tape back a year and the equivalent figures were 60.5 (April) and 56.4 (May). May’s figure for IT contracting falls below the previous low-point of 49.6 recorded in October 2011.

However, the picture is not relentlessly gloomy. Contractors living in the Midlands area benefited from a particularly strong regional performance, although the growth was comparatively modest and fell well short of the long-run series average. Even though IT opportunities were fewer than in April, IT and engineering/construction vacancies rose at faster rate than openings in any other sector.

Commenting on the report, REC Chief Executive Kevin Green said: “The temporary staff market has been contracting for the last six months; however, it’s important to note that there are still over a million people per week working flexibly. Employers value the ability to flex their staffing costs based on current and future demand.”

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