Job growth slows as public sector cuts begin to bite

Job vacancies increased last month at the slowest pace for eight months, suggesting that public sector jobs cuts are starting to bite, new research has revealed.

The Report on Jobs survey, by the Recruitment and Employment Confederation (REC) and professional services firm KPMG, found that overall demand for staff dropped to 57.8 last month, down from 59.4 in June – on a scale where anything above 50 represents an increase. This was the least marked growth since November 2009, the research showed.

Other findings showed a slowdown in the number of people places in permanent jobs, however staring salaries rose for a ninth consecutive month.

Bernard Brown, partner and head of business services at KPMG, said: “The UK job market continued to slow down in July with overall demand for staff rising at the slowest pace in eight months. Surprisingly, engineering and construction is the sector where staff was most in demand, an indication of a sustained recovery in the manufacturing sector.

“However, the sharp decline in the demand for healthcare professionals comes as a direct result of government cutbacks and cost reduction in the NHS, and is a sign of things to come as the public sector prepares for more spending cuts which are likely to impact the jobs market further.”

Kevin Green, chief executive of the Recruitment & Employment Confederation, added: “This is the first real indicator that cuts in the public sector are beginning to bite. Nowhere is this more apparent than in nursing and medical care where demand for both permanent and temporary staff has fallen away drastically compared to last year when it was the only sector experiencing growth.

“With 600,000 job cuts forecast in the public sector over the next year, the Government must do everything possible to boost job creation in the private sector – in particular by reducing business taxation and regulation. At the same time, public bodies must avoid knee-jerk cuts to staffing levels which not only threaten the recovery of the UK jobs market but also undermine the delivery of key services.”

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