MNI DATA ANALYSIS: UK Pay Growth Rises, Permanent Jobs Up

--Markit/REC Permanent Positions 55.9 in Nov Vs 55.3 In Oct 

By David Robinson

     LONDON (MNI) - Salaries for those entering new, permanent jobs in the UK

continued to rise at a brisk pace in November while staff availability continued

to decline, a report by IHS Markit for the Recruitment and Employment

Confederation(REC) showed.

     The Permanent Placements Index, a measure of monthly growth in permanent

positions, rose to 55.9 in November from 55.3 in October while the permanent

salaries index dipped to 60.6 from 61.2, still well above the 50 unchanged

level. The REC survey reflects only those finding new work and does not capture

pay changes for the bulk of the workforce in existing employment.

     The REC survey has consistently painted a picture of shrinking staff

availability and rising pay. The Permanent staff availability rose to 36.4 in

November from 35.8 October, still deep in contractionary territory, while the

temporary/contract staff availability measure fell to 38.7 from 39.6.

     Recruiters "continue to report deteriorating candidate availability and

worsening skill shortages ... Although some hirers are responding by raising

starting salaries in an attempt to attract scarce talent, there's no evidence

yet this is leading to pay increases for the wider workforce," Kevin Green, REC

Chief Executive, said.

     With recruiters finding it hard to find staff to fill slots job vacancies

have continued to growth, with the vacancies index standing at 63.2 in November

compared to 63.6 in October.

     The UK unemployment level in the most recent official data fell to 4.3% in

the three months to September, its joint lowest level since 1975 but average

weekly earnings growth dipped to 2.2% from 2.3% in August, compared to 2.4% see

in 2016.

     A hot debate for monetary policymakers is whether earnings growth across

the economy will pick-up in 2018, with the REC survey's previous high readings

for pay growth in new jobs not being reflected in overall pay growth. The

majority view on the Bank of England Monetary Policy Committee is that earnings

growth will accelerate, albeit modestly.

     BOE Deputy Governor Ben Broadbent said in a 15 November speech that while

the data showed lower growth in real earnings for any given level of

unemployment in 2013-2017 compared to 1993-2012  "all else equal, a tighter

labour market is likely to mean faster wage growth."

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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