Ryan FowlerRecruitment activity across the UK continued to decline in May, with permanent placements falling at a faster rate and temporary billings declining at the slowest pace in six months.
The latest KPMG and REC UK Report on Jobs, compiled by S&P Global, found that overall demand for staff fell at its weakest rate in eight months.
Candidate availability rose at the fastest rate since December 2020, with redundancies and reduced job opportunities contributing to the increase.
The report noted a quicker rise in the supply of both permanent and temporary candidates, with permanent supply seeing the steeper rise.
Rates of starting pay improved in May. Salaries for new permanent joiners increased at the quickest rate since last August, driven by competition for skilled candidates. Temp wage growth also reached a 12-month high, although both remained below historical trends.
Jon Holt, group chief executive and UK senior partner at KPMG, said: “May’s data shows very little change.
“Employers are still holding back on hiring, which meant last month the number of jobseekers increased at the steepest rate since 2020.
“The first half of this year has been full of uncertainty for businesses who are still trying to navigate cost pressures, technology advancements and global risks.
“Business leaders will want to see how the new trading agreements with the US and EU, Government spending plans and the Modern Industrial Strategy will drive forward our economic growth.
“To boost the jobs market employers need to feel confident about the outlook and understand how AI will impact their business.”
Neil Carberry, chief executive at REC, added: “More encouraging signs in temp billings, vacancies, and stabilising private sector demand offer a measure of optimism as we head into the second half of the year.
“There are early signs of promise, particularly in the Midlands, which saw its first increase in permanent placements in a year and a rise in billings after four months.
“Meanwhile, the downturn in temporary billings has eased further in London and the North of England.
“The big test now is whether the Spending Review convinces more employers to dance at the party by turning intent on hiring and investing into action.”
Engineering was the only sector to see improved demand for both permanent and temporary workers. Hotel & Catering, Nursing/Medical/Care, and Retail recorded the sharpest declines.
Regionally, the South of England saw the steepest drop in permanent placements and temp billings, while the Midlands bucked the trend with marginal growth.
Hannah Goldstraw, senior recruitment consultant at Barrow Mount Recruitment, said: “We’re seeing a noticeable rise in candidate registrations, but decision-making from employers remains slow.
“The demand is still there in pockets – especially for technical and specialist roles – but uncertainty is definitely weighing on hiring momentum.”
