Demand For Staff Hits 25 Mo High; Pay Growth Rises: Markit/REC

-UK August Permanent Placement Index 58.0 V 58.4 JUL: KPMG/REC

By Jamie Satchithanantham

     LONDON (MNI) - While UK wage growth has been subdued in recent months, a

survey of recruitment consultants found growth in pay packages was gaining

momentum amid high staff demand and falling candidate availability.

     The Recruitment and Employment Confederation/Markit survey found the

measure of permanent pay growth rise for the fourth consecutive month, up 0.9

points to 61.5 in August.      

     The pick up in the Permanent Salaries Index came as the Jobs Vacancies

Index rose to 65.1 in August from 63.8 in July, a 25 month high, and the stock

of candidates to choose from continued to shrink. 

     The Availability of Staff index fell to 35.2 in August, down from 35.7 in

July, fixed securely in contractionary territory.

     According to the survey there was evidence of firms "seeking more

professional and managerial capability", with the likes of financial directors,

analysts and HP professionals in demand. 

     In addition, the report continued to report a "significant" shortage of

people to fill blue collar roles such as drivers, electricians, and construction

workers, and this is being "exacerbated by a fall in net migration from the EU".

     The survey's headline permanent placements measure moderated to 58.0 in

August, holding onto most of July's 2.5 point rise that then left the index at a

27-month high of 58.4.

     The REC/Markit survey measures marginal changes in pay rates, capturing

only those who are moving jobs or starting afresh in the labour market, while

excluding pay deals covering existing employees. Its impact on overall pay

growth is dependent on the extent of job churn.

     "In many areas of the jobs market candidate supply cannot meet demand.

Employers are having to offer more money to secure the people with the skills

they need. While the working population in general has experienced a pay

squeeze, there are clearly opportunities now to earn more by moving jobs," Kevin

Green, REC Chief Executive, said.

     In the August Quarterly Inflation Report, the Bank of England lowered its

forecast for average weekly earnings growth to 3% for the fourth quarter of 2018

from 3.5% back in May, with Q4 2017 left unchanged at just 2%.

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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