UK Job Vacancies Fall, Indicating Cooling Labor Market
British Employers Cut Job Vacancies, Hiring Declines
For the first time in over two-and-a-half years, British employers have reduced their job vacancies, signaling a cooling in the labor market, according to a recruiters’ industry body. The contraction in demand for staff, particularly in the public sector, represents the first fall since February 2021. Additionally, the hiring of permanent staff has continued its year-long decline, although the decrease in September was less severe than the sharp drop in August and the reduction in July.
Positive Outlook Despite Market Slowdown
Despite the ongoing slowdown, the Recruitment and Employment Confederation (REC) Chief Executive Neil Carberry suggests that the latest figures indicate the job market may be finding its bottom after a year-long decline. Carberry believes that the relative buoyancy of the private sector is driving this more positive outlook.
Lower Wages and Strains on Company Budgets
According to REC and KPMG, starting salaries have risen by the smallest amount in two-and-a-half years, and there are reports of strains on company budgets. Economist Samuel Tombs predicts that the survey suggests a slowdown in month-to-month wage growth later this year, reducing the likelihood of further interest rate hikes by the Bank of England in the near term. However, official measures of core earnings growth for workers in Britain have been running at record highs.
Temporary Worker Spending Returns to Growth
After a dip in August, spending on temporary workers has returned to growth, indicating a positive trend for the labor market. Firms in hospitality, engineering, logistics, and healthcare continue to show strong demand for staff.
Overall, the decrease in job vacancies and hiring, along with lower wage growth and strains on company budgets, suggest a cooling in the UK labor market. However, the relative strength of the private sector and the return to growth in spending on temporary workers provide some optimism for the future.
