• Swindon & Wiltshire Economy
• Wednesday February 19 2025
• Author Name: Peter Davison

Job vacancies decline at fastest rate since financial crisis

Vacancies in the South of England are declining at the fastest rate since the financial crisis, according to an influential jobs market report.

Both permanent hires and temporary billings decreased at significant rates in January, according to the latest KPMG and REC, UK Report on Jobs: South of England survey.

Big Four accounting firm KPMG and the Recruitment & Employment Confederation put the decline down to “recent changes in employment policies outlined in the UK government’s Autumn Budget, a sluggish economic climate, and increasing uncertainty for the upcoming year.”

The report suggests that businesses purposefully chose to trim their workforce numbers during the month, and that redundancies reportedly contributed to a growing pool of available candidates.

Additionally, recruiters also observed that permanent employees seeking to boost their incomes led to an increase in the supply of temporary workers.

Furthermore, demand for new employees was adversely affected, with job vacancies for both types of staff declining markedly and at the fastest rates observed since 2009 during the global financial crisis, excluding the pandemic months.

The weak labour market situation in the South of England resulted in reduced pay across the board, with permanent salaries and temporary wage rates decreasing for the third and second consecutive months, respectively.

Decline during January means the South of England has now had 22 months of employment contraction.

However, for the first time in 11 months, the South of England did not register the most severe reduction in new permanent joiners of the four monitored English regions. The worst performing region was the North of England.

David Williams, Bristol office senior partner at KPMG UK, said: “January brought a fresh set of challenges for the job market in the South of England, with a notable drop in both permanent and temporary placements.

“Sluggish growth continues to cast a shadow over hiring decisions, and employers are treading carefully in light of the upcoming increase to National Insurance contributions.

“Notably, the South of England was the only region to see a decline in starting salaries, which could prove a silver lining for businesses in the region.

“This dip in the cost of hiring should allow companies to bring in talent at more budget-friendly levels, and could help to ease the growing pool of candidates actively looking for work.”

REC chief executive Neil Carberry added: “Businesses entered the year uncertain on the growth path, and that has driven a “wait and see” approach to hiring.

“Around the country, REC members report that clients have plans and are hopeful for the year ahead – but firms are slowing investment until they see more momentum in the economy.

“The recent move on interest rates was timely as a way of boosting confidence. The more central role of growth in Government thinking since the Chancellor’s speech last month will also help. But it takes time, and real action, to build business confidence.

“An autumn of fiscal gloom, difficulty navigating significant upcoming tax rises and little progress on the practicalities of a costly new approach to employment rights are all acting as brakes on progress.

“As well as the monetary stimulus to growth, it’s time for greater clarity on how the Government will use its industrial strategy to drive the growth of the whole economy.”

Photo by Tim Gouw at Pexels

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