Further stabilisation in UK jobs market seen last month

The UK jobs market showed signs of stabilising last month, according to a report by KPMG and the Recruitment & Employment Confederation on Friday.

The report showed a slight increase in temporary billings, income recruiters receive from placing temporary workers. Permanent placements, meanwhile, declined at a slower pace.

"Economic uncertainty continues to weigh heavy on business, but further stabilisation in the jobs market last month indicates that a budget that builds business confidence, could be a catalyst for renewed hiring," KPMG analyst Jon Holy commented.

The temporary billings index rose to 50.2 points in October from 46.0 in September. Climbing above the neutral 50-point mark separating growth from contraction, it indicates an increase in billings received from the employment of short-term staff in October. It was the first expansion since June 2024.

Survey compiler S&P Global said: "A number of monitored recruiters indicated that a preference for temporary staff over permanent workers to fill roles had helped to lift billings. That said, relatively subdued overall demand for staff amid a weaker economic climate had dampened the rate of growth."

Meanwhile, the permanent placements index edged up to 45.2 in October from 44.8 in September, indicating a slower decline in the appointment of permanent staff.

The total vacancies index ticked up to 43.2 in October from 43.0 in September, indicating a slowed reduction in demand for staff. Overall vacancies have fallen throughout the past two years.

Meanwhile the permanent staff availability fell to 65.1 in October from 65.5 in September, but remained easily above the neutral 50-point mark. This indicates another substantial increase in the number of candidates seeking jobs, albeit the pace of growth moderating slightly.

The temporary staff availability index edged down to 64.1 in October from 65.2 in September.

S&P Global said: "Recruitment consultancies across the UK signalled that growth of temporary labour supply eased further from August's post-pandemic peak, but remained rapid overall. According to anecdotal evidence, fewer contract roles, hiring freezes and company layoffs had pushed up temporary candidate numbers."

REC Chief Executive Neil Carberry said: "The report today is the best we have seen since the summer of 2024. There is a broader base of demand forming, from accounting and finance to logistics and IT roles. The budget must give employers confidence to invest, with a focus on unlocking potential

through delivering on skills reform, supporting business investment and reforming the approach to the employment rights bill, which needs a dose of practicality and realism."

The KPMG and REC UK report on jobs is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies. Responses were collected between October 9 and 27.