Delayed decision-making and a lack of demand amongst companies have weighed on recruitment activity according to the latest Report on Jobs survey carried out by KPMG and the Recruitment and Employment Confederation (REC).

Permanent staff appointments continued to fall in May, for the 20th successive month, the latest survey of UK recruitment consultants highlighted. However, the latest decline was modest and the slowest since March 2023.

A similar trend was seen for temp billings, with the latest contraction the weakest in four months.

Amid reports of a competitive market landscape, alongside evidence of a ripple impact on base pay rates following April’s increases in the National Minimum and Living Wage, typical starting pay for candidates rose again during the month under review.

For permanent workers, salaries were reported to have increased markedly and to only a slightly lesser extent than April’s four-month high.

Chief Executive and Senior Partner of KPMG in the UK, Jon Holt, said: “We know our labour market is resilient. The big picture is that unemployment is historically low with the ease of filling vacancies back to pre-pandemic levels. Taken together with today’s data and expected interest rate cuts, inflation easing and increased consumer confidence over the summer, we will hopefully move towards a better economic outlook for the second half of 2024.”

However, he went on, May’s data underscores the complexities in the current labour market with demand overall remaining weak while some sectors saw growth.

A lack of skilled applicants and employers competing for the best talent could put further upward pressure on pay.

The REC has reported concern that the increase in the National Minimum Wage has contributed to a fall in the number of vacancies for summer seasonal work.

Examples of the biggest falls in demand for summer seasonal occupations (April and May 2024 compared to the same two months last year) include restaurant and catering establishment managers and proprietors (-38.1%), hotel and accommodation managers and proprietors (-44.5%), chefs (-32.5%), leisure and theme park attendants (-34.1%), gardeners and landscape gardeners (-21.9%) and most roles in construction.

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