UK hiring activity weakened slightly in March, offering tentative signs of stabilisation in the labour market after a subdued start to the year.
Recruitment consultancies reported a marginal fall in permanent placements and a slower pace of decline in hiring of temporary staff, according to the latest UK Report on Jobs by KPMG UK and the Recruitment and Employment Confederation.
Although demand for workers continued to weaken, the rate of reduction eased for the third consecutive month, the report said.
The Permanent Placements Index — the report’s main hiring measure — was just below the neutral level of 50, at 49.2, unchanged from February. Hiring of contract workers, referred to in the report as temporary billings, also declined at a modest pace. The Temporary Billings Index was at 48.4, slightly above February’s 48.0.
Demand for permanent staff fell for the 31st consecutive month, but March marked the weakest reduction in permanent vacancies since last May, the report said.
Recruiters cited ongoing uncertainty and rising costs as factors that continued to weigh on hiring decisions.
Demand for high-quality candidates also placed upward pressure on starting pay, according to recruiters. Pay growth in March was the weakest observed since October.
“[U]ntil the wider economic impacts of the conflict in the Middle East start to become clearer, many employers will remain cautious about committing to new roles,” Jon Holt, group CEO and senior partner at KPMG UK, said in a news release. “If that uncertainty remains, the risk is that hiring decisions and investment are deferred again, delaying any sustained recovery in the jobs market.”
The survey, compiled by S&P Global, relies on responses from about 400 UK recruitment and employment consultancies.
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