Jobs market revival signalled by industry report

The number of people placed in permanent jobs rose at the fastest pace in nearly 13 years – delivering the “clearest sign yet” of a revival in the jobs market, the latest data has shown.

The monthly Report on Jobs by the Recruitment and Employment Confederation (REC) and professional services firm KPMG found the number of permanent staff appointments increased to an index reading of 65.2 in March – on a scale where 50 means no change – compared to 63.2 the previous month (see chart below). It is the strongest recorded growth since the survey began in October 1997.

The number of temporary jobs placed also rose by three points to 60.9, the fastest rate in nearly two years.

Vacancies available to jobseekers increased for a sixth consecutive month during March. However, this was down from February’s reading.

Kevin Green, REC chief executive, said: “Permanent appointments increasing at the fastest pace for more than 12 years is the clearest sign yet of a revival in the UK jobs market.”

Demand is also increasing for jobseekers in the IT and engineering sectors, as well as for secretarial and back-office support roles, he added.

However, Green warned the overall outlook was tempered by forthcoming public expenditure cuts. Under a Labour government, Whitehall, the NHS and the police service will be forced to claw back £11bn in costs by 2012-13, which will inevitably lead to back-office job cuts.

Bernard Brown, partner and head of business services at KPMG, said: “A lot of the current hiring activity is going on in the public sector. The public sector recession which clearly is on the cards hasn’t hit the jobs market yet, but when it does, the upward trend we have seen over the past couple of months may come to a halt.”

The Report on Jobs also found permanent staff salaries rose again in March. Temp pay increased at a pace that, although modest, was the sharpest since June 2008.

The supply of both permanent and temporary/contract candidates increased at slightly faster rates compared with February.

Last month, data from the Office for National Statistics revealed total public sector pay rose by 3.8% in the three months to January 2010 compared to a year earlier. Private sector pay for the same period was frozen.

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