Permanent jobs show fastest rise in two-and-a-half years

The number of people placed into permanent jobs saw the greatest increase in two-and-a-half years last month, research has revealed.

The monthly Report on Jobs survey by the Recruitment and Employment Confederation (REC) and KPMG found that the index for the number of permanent job placements rose to 63.2 in February – on a scale where 50 indicates no change – compared to 60.5 in January.

This was the fastest rate of increase since July 2007, before the recession hit. The number of people placed into permanent posts has increased for seven consecutive months.

There was an overall increase in demand for all staff as the number of vacancies available increased for the fifth consecutive month from and index of 51.2 in October 2009 to 62.4 in February.

Bernard Brown, partner and head of business services at KPMG, said: “The latest figures seem to confirm that the UK jobs market is on the road to recovery. Permanent job placements are growing at their fastest pace since July 2007, with both vacancies and salaries increasing.

“However, this all comes with one big warning: the impact of the inevitable public sector recession on the jobs market has yet to be felt and will be played out over the next six to 12 months.”

But the survey of 400 recruitment agencies found that the growth in the placement of temporary jobs eased from an index of 59 in January to 57.9 in February.

Demand for permanent secretarial and clerical staff saw the biggest growth over the past year, up to 66.5 from 25.5 in February 2009, and permanent IT and computing staff also saw an increase in demand, reaching 64.7, up from 30.8 at the same point last year.

The survey also revealed that the growth of permanent staff salaries accelerated to a 20-month high in February, to an index of 54.1, up from 53 in January.

Kevin Green, chief executive of the REC, added: “Looking ahead, there are indications that recruitment in the public sector could drop off fast. A new approach to public sector resourcing is now critical and will have a direct impact on the wider employment outlook.

“Rather than responding with random job cuts, the public sector needs to embrace radical reform. Flexible working must be seen as part of the cost solution, rather than the problem.”

Earlier in the week, a survey by the BBC revealed that councils could need to cut one in 10 of their staff in the next five years.

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