UK jobs market: Bad but getting worse more slowly

The UK jobs market, for both permanent and temporary positions, is in a bad way - but it is getting worse more slowly than it has for months.

KPMG's monthly check on the jobs market found that the decline in temporary and permanent positions slowed in May, with demand for IT rising up the chart. The fall was the slowest in seven months and a sharp decline from February's record drop, which saw permanent staff positions filled fall 44 per cent.

Mike Stevens, Partner and Head of Business Services at KPMG, said: “There is now some reason to hope that the UK jobs market has overcome the worst, at least for this phase of the recession. For the third successive month we have seen a slowing in the rate of decline in both temporary and permanent staff appointments.

"Demand for staff is still falling but much less fast than at the beginning of the year."

However, Stevens said it was hard to build optimism with so much of the world still deep in recession. He said the situation was made worse by uncertainty about public sector spending because the current government is entering its last year in office and "is losing the capacity to borrow".

On the other hand, candidate availability is still rising which is keeping a downward pressure on wages.

The survey goes out to 400 recruitment firms. It found temporary billing fell 16 per cent in May compared to last month, versus falls of 42 per cent in December last year and 50 per cent in January.

Demand for permanent IT staff is up from fourth place last year to second spot this year - temporary IT staff have seen an identical jump in position.

But permanent salaries, and hourly temp pay, both fell for the eighth successive month.

The full report is available to download from here. ®