February IT vacancies rise at slowest rate since September 2016

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8 March 2019 – The latest Report on Jobs, published today by KPMG and the REC, showed softer increases in demand for both permanent and temporary IT workers during February.

Adjusted for seasonality, the IT & Computing permanent vacancies index slipped from 61.0 in January to 60.2 in February. While well above the 50.0 level that separates growth from contraction, it was the lowest reading for nearly two-and-a-half years. That said, this still pointed to a sharp rise in demand for workers. In addition, IT & Computing continued to outperform the UK average (57.2), as well as ranking first out of ten in the permanent staff demand rankings.

In line with permanent vacancies, demand for temporary staff in IT & Computing rose at the slowest pace since September 2016, according to February survey data. The respective seasonally adjusted index posted 55.9, down from 56.4 in January. Growth of demand in the sector also remained weaker than the UK average (57.0). Of the ten monitored job categories, IT & Computing ranked fifth.

Ian West, head of TMT at KPMG UK said: “Overall the labour market has been incredibly resilient over the last couple of years as employers have opted to hire more permanent and temporary staff rather than invest in long term productivity gains.  However in 2019, Brexit uncertainty is having an opposite and chilling effect on the jobs market, with firms reassessing their level of risk. With a decision on Brexit now imminent we’re seeing a slowdown in the pace for hiring in the IT sector amongst others.

“With unemployment at its lowest level since 1975, widespread skills shortages are also cooling the jobs market.  This means candidates with the right skills are commanding ever higher premiums and pay growth is now at a 10 year high.  This has seen pay outstripping living costs meaning people feel better off.

“Once a political decision is made on Brexit we expect a wave of pent-up investment to be released in parallel with a renewed focus on cost reduction.  This should result in another busy time for the jobs market later this year.”