By Daniel Hunter

There was a modest rise in permanent staff appointments for the first time in four months during January, the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs published today (Wednesday) has revealed.

However, agencies’ temporary/contract staff billings fell slightly for the second month running.

The key points of the report were:

- Modest increase in permanent appointments recorded
- Temp billings down slightly
- Candidate availability rises, but at slower rate
- Subdued pay pressures

Recruitment consultants reported a slower increase in job vacancies during January. Growth of overall demand for staff eased to the weakest for 27 months. Data suggested that Engineering/ Construction workers were the most sought-after in the latest survey period, in contrast to declines in demand signalled for Hotel & Catering staff.

The availability of staff to fill job vacancies continued to rise in January. However, growth of both permanent and temporary/contract staff availability eased from the strong rates recorded in December

Permanent staff salaries rose only marginally in January and at a much slower pace than the long-run series average. Hourly rates of pay for temporary/contract staff increased modestly following a slight decline in December.

“This month’s report on Jobs highlights that there are glimmers of hope for the UK jobs market with permanent placements increasing for the first time in four months," Kevin Green, the REC's Chief Executive, said.

"This is the first positive indicator for some time that employers are looking to hire staff despite the ongoing weakness of the economy. It is particularly encouraging that six out of eight sectors surveyed show growth in demand, including engineering, IT and office professionals.

"The report on Jobs also follows better than expected services data from the Purchasing Managers’ Index last Friday, which suggests that confidence is growing amongst consumers as well as businesses.

“Although temporary billings have contracted slightly over recent months, the latest figures show an improvement on December. This confirms that there is still little evidence that the Agency Workers Regulations have had a significant impact on hiring and employers are still making considerable use of flexible working arrangements.

“A major challenge in the jobs market is the disconnect between what employers are looking for and what jobseekers can offer. Better careers guidance is part of the solution, as is increased use of apprenticeships to get young people into employment with vocational skills development.”

Bernard Brown, Partner and Head of Business Services at KPMG said the data was a welcome surprise.

“Given the continued impasse surrounding the Eurozone and the knock on effect this has on business confidence, it is a welcome surprise to see a modest increase in the number of permanent job placements across the UK," he said.

"Perhaps employers are beginning to accept that they need to have the right people in place to kick start the economy?

“Sadly, though, the number of people hoping to fill these vacancies continues to rise and with unemployment benefit claimants up for the tenth month in succession, the competition to be the right candidate in the right place is tougher than ever.

“At least there are signs within some industries that things are looking up. Amongst the engineering, construction and IT sectors demand for permanent staff has increased since the turn of the year. With so much attention being paid to these sectors at the moment, close attention should be paid to see if this is a trend set to continue as the year progresses.”

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