The decline in permanent job placements across the North eased to its softest rate for five months in July, but fears over a second Covid wave "weigh heavily" on employer decision making, a new study has shown.
The KPMG and REC UK report on jobs today reveals July saw a softer, but still marked decline in recruitment activity, with demand for permanent and temporary staff continuing to fall sharply.
That was while staff availability rose "substantially" as firms announced waves of redundancies due to the impact of the coronavirus pandemic.
The report was compiled by IHS Markit and based on responses from 100 recruitment and employment consultancies across the North. It also revealed that the combination of higher labour supply and weaker demand for workers drove sharp falls in both starting salaries and temp wages.
Jennifer Lee, head of KPMG’s Liverpool office, said: “With the softest rates of decline seen for five months, it’s encouraging to see the downturn in recruitment easing across the North West as parts of the economy reopen.
“However, we are still a long way from being out of the woods, with hiring plans remaining on ice and the uncertain outlook – compounded in part by concerns around a possible second wave of the virus and the reintroduction of lockdown measures across parts of the region - still weighing heavily on business’ recruitment decisions.
“As the furlough scheme unwinds, unemployment is likely to rise further, proving both an opportunity and challenge for government to create training and skills programmes for jobseekers – and help bring confidence back to our regional workforce.”
The month also saw the fastest decline in permanent starting pay since May 2009 - during the global financial crisis.
A combination of increased supply and weaker demand for temporary staff in the North of England saw their remuneration fall further at the start of the third quarter. That result extended the current run of decline to five months.
Neil Carberry, chief executive of the REC, said: “While permanent placements still decreased last month, the pace of decline has slowed hugely as the tide turned on lockdown.
"With the economy opening up through June and July, we would expect an improving trend in the coming months as firms recover from the worst of the crisis. The fact that temp billings rose in the North and demand is now increasing for temporary blue collar and construction workers is also a good sign.
“There are far fewer vacancies in the market than before March, and more people looking for jobs. Recruiters will be key to helping people build confidence and find work – but the reality is that Government needs to help kickstart hiring.
"Reducing employers’ National Insurance rates would cut the cost of hiring, and a good Brexit trade deal will also support stronger business confidence and investment.”
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