Commenting on last month’s figures we stated that we believed the improvement was not well founded and this view has been endorsed as the Recruitment and Employment Confederation and KPMG permanent placements index fell from 63.2 in April to 61.3 in May as the slowdown in the sector continues. The index hit a 12 year high of 65.2 in March although there are serious concerns in the short term regarding the almost inevitable mass redundancies expected in the public sector.
Even though the number of job vacancies in the UK continues to rise “Many of these are fishing trips as Employers test the waters” said Chris Slay an employment specialist. “This is prudent management but you need to read between the lines rather than go for the hype. We expect unemployment to rise sharply in the next quarter as public sector fallout commences” . The UK government is looking to slash at least £60 billion from the current budget although with interest charges approaching £70 billion a year by 2015, more budget cuts will be required.
The recruitment sector is often a very strong indicator of underlying economic activity because many companies will look at short-term employment positions prior to committing themselves to longer-term roles. If this is the case then it looks as though the UK economy is going to struggle in the short to medium term, something we agree with.
Author: Ian Macdonald
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