Jobs market cools further over economic concerns and rising costs
Hiring activity fell further in July as the UK jobs market was weighed down by concerns over the economic outlook and increased labour costs, according to new figures.
Growth in starting salaries also slowed to its lowest level for more than four years as firms tightened their recruitment budgets.
The monthly KPMG and REC report on jobs showed a “further steep decline” in permanent staff appointment in July.
The influential report showed a reading of 40.0 for permanent placements in the UK, improving slightly from 39.1 in June.
Decline
However, any figure below 50 represents decline in the job market, with levels over 50 showing growth. The data therefore indicated another month of contraction.
Jon Holt, group chief executive and UK senior partner at KPMG, said: “The labour market cooled in July as chief execs held back from increasing their recruitment budgets.
“Economic uncertainty, the complexities of AI adoption and global headwinds are all weighing on business planning.”
Recruiters frequently said in the survey that weak confidence about the economy and “increases in payroll costs” were factors causing the drop in hiring.
It pointed towards a “steady” jobs market in certain sectors, such as engineering, but flagged a continued drop in hiring in retail and hospitality.
Inflation
Meanwhile, starting salary inflation slowed for a second month in a row to its lowest level since March 2021.
The data comes after the Bank of England pointed towards slowing wage growth over the coming year while the unemployment rate could tick higher.
Kate Shoesmith, REC deputy chief executive, said: “There is a path to jobs market recovery – but it will take co-ordinated action from Government, the Bank of England and businesses to maximise on any potential upswing.
“With starting salaries and temporary pay rising only modestly, it was right to cut interest rates last week.
“More action like this, to stabilise the business cost-base, is what will support growth and boost the jobs market this year.”
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Can the UK Governments please start to given all its blinking focus on fixing the economy, the jobs market, the poor state of our public services and our cost of living crisis? Stop listening and copying anything Garage and deform say and just fix what is going wrong. Tax the rich, and build up the poor.
oh no we can’t possibly tax the people who actually have money… they might… run away. Assuming they suddenly want to cut off a massive chunk of profit they’re earning and apparently no one else from the UK could possibly do the job, especially not gasp a woman. (/sarcasm)
But the rich use plenty of distractions, prop up plenty of eloquent people and get them spout out nonsense which for some weird reason makes sense to many people. Frump used that and see where he got to. Garage is using that technique as well.
Maybe we should stop wealthy individuals influencing the media. Perhaps there should be a limit on how much of a traditional or social media outfit any one individual can own.