UK job vacancies fall at slower pace as service sector picks up

"An index tracking permanent hiring, produced by the Recruitment and Employment Confederation and KPMG, rose to 49.2 in February, up from 46.9 in January. Although the reading remains just below the 50-point threshold that separates expansion from contraction, it marks the strongest result since March 2023 and indicates that the pace of decline in recruitment is easing."

"Businesses have been grappling with a difficult combination of higher operating costs and weaker economic confidence. Recent policy changes, including increases in employer national insurance contributions and higher statutory wage levels introduced during Chancellor Rachel Reeves's first two budgets, have pushed up payroll expenses across many sectors."

"Those changes have contributed to a softer labour market, particularly for entry-level roles and younger workers. Official statistics show unemployment has risen to its highest level since the pandemic, with youth unemployment climbing to 16.1 per cent, the highest rate in more than a decade."

UK hiring decline shows signs of stabilization as the Recruitment and Employment Confederation and KPMG index rose to 49.2 in February from 46.9 in January, marking the strongest result since March 2023. Although still below the 50-point expansion threshold, the data indicates easing recruitment decline and potential labour market turning point. Job vacancies continued falling but at a moderated pace after 28 consecutive months of decline. Employers face pressure from higher operating costs, increased employer national insurance contributions, and elevated statutory wage levels. These factors particularly impact entry-level roles and younger workers, with youth unemployment reaching 16.1 percent. Recruitment leaders suggest the hiring downturn may be approaching its lowest point.

Read at Business Matters