By Daniel Hunter

The latest Recruitment and Employment Confederation (REC) and KPMG Report on Jobs, published today (Monday), has shown that permanent placements fell for the first time in six months during June.

Meanwhile temporary/contract staff billings were down for the seventh month running, with the rate of decline accelerating to the fastest since July 2009.

Overall demand for staff showed the weakest increase for five months in June. Growth of permanent vacancies eased further, but temp vacancies rose at a fractionally faster pace.

Recruitment consultancies indicated higher levels of both permanent and temporary staff availability during June, with the latter recording the stronger growth.

“The sharp drop in the number of people placed into work last month is really disappointing. A decrease in hiring activity means we could see a period of increased unemployment, especially as a new wave of school leavers and graduates will be entering the labour market over the summer," Recruitment and Employment Confederation chief executive Kevin Green said.

"The UK labour market has been remarkably resilient throughout the downturn and our slow economic recovery. However, employer confidence is fragile and it’s not that surprising that under the weight of the eurozone crisis and other bad news placements fell in June.

“I expect as we continue to make slow progress out of recession that we’ll see this kind of a zig-zag pattern with some good months followed by weaker ones — rather than sustained periods of uninterrupted jobs growth.

“There is still demand for workers and vacancies continue to rise. Recruiters tell us that employers are still hiring, but their increased sense of caution is manifesting in them taking longer to make decisions and to confirm hires — and that slow down in the recruitment process is clearly having a negative impact on the number of placements. But it’s also important to note that the picture is not uniform across all industries. If you are a skilled engineer, IT professional or in nursing or secretarial work there is still increasing demand for you from employers.”

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