MNI DATA: UK Staff Appointments Hit By Uncertainty In Jan: REC

--UK Jan Permanent Placements 49.7 v 53.7 Dec: Markit/REC

By Jai Lakhani

     LONDON (MNI) - UK staff appointments shifted below 50 for the first time in

18 months in January, as rising economic uncertainty and ongoing candidate

shortages impeded labour market performance at the start of 2019, the Markit/REC

Report on Jobs survey released Friday showed. 

     Whilst Permanent staff placements contracted, temporary staff placements

saw a noted softening to start the year, dropping 5.3 points to 51.5. 

     Anecdotal evidence appeared to suggest that concerns over Brexit and a

further deterioration in candidate availability drove the permanent placement

indicator into contraction. The effect was also felt in temporary billings

despite the reading being above the 50.0 change/no-change mark. The temporary

billings reading of 51.5 was the joint-slowest pace in nearly six years of

continuous growth. 

     "With Brexit just 50 days away now, it's definitely a nervous time for

recruiters. January marked the first fall in permanent staff appointments since

the referendum and we've seen a sharp decline in the number of candidates

entering the jobs market," said James Stewart, Vice Chair at KPMG. 

     --VACANCIES                                                   

     Coupled with slowing hires, the overall rate of vacancy growth was down to

its least marked for 27 months. However, it still remains at historically

elevated levels. 

     The job vacancies index slipped 0.8pp to 59.2 in January, driven by a 0.8pp

decline across the permanent index to 59.2 and 1.2 points in temporary staff to

58.5.  

     "Both employers and employees are in 'wait and see mode' now and there is

little reason to believe the brakes will come off the jobs market before we find

out what sort of Brexit the UK is about to experience,"  added Stewart.

     Starting salaries continued to increase last month, with the overall

availability of staff continuing to decline sharply, a 20 month record in

January. As a result, the permanent salaries index was up on the month and

despite falling, the temporary salaries index remained high. 

     The permanent salaries index rose 0.8pp to 63.4 in January. Temporary wages

were down a touch to 58.5 from 59.7 previously. 

     -REC REPORT ADDS TO LIST OF DATA SHOWING NEED FOR BREXIT AGREEMENT

     "This is the first month since July 2016 where permanent placement numbers

have dropped, with weaker- but still positive- performance for temporary roles,

and the lowest rate of vacancy growth for over two years. But we should be

careful not to overreact- employment rates are high, and the performance of our

labour market overall is still strong," said Neil Carberry, Chief Executive at

the REC. 

     "That said, the survey results are a sharp reminder to politicians in

Westminster and in Brussels of the need to provide businesses with clarity about

the path ahead, so that they can invest with confidence," he added.

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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