Contractor placements continued to rise in May, although at an eased rate of expansion. Despite this, demand for contract staff increased month-on-month, suggesting that the looming EU referendum hasn’t served to quell clients’ appetites for hiring despite warnings that an out vote could destabilise the economy.
This is according to the Recruitment and Employment Confederation’s (REC) Report on Jobs for May 2016, which shows that contingent staff are still the favoured option for many clients, with permanent placements rising at the weakest rate in eight months.
Whilst contractor agency billings growth slowed down from April’s 13-month high, the rate of expansion remained marked overall. This was matched by a similarly healthy rise in contractor demand. For REC chief executive Kevin Green, the increasing contractor demand is indicative of worsening skills shortages that a Brexit threatens to intensify:
“UK businesses are now facing candidate shortages in nearly every sector of the economy. We need more people with the right skills for the jobs that are available.
“Whatever happens post 23 June we need to ensure a sensible approach to immigration is taken, so that employers have access to the people they need. Sourcing workers from outside the UK is going to be an ongoing necessity if we are to continue seeing the British economy grow.”
Green’s sentiment is echoed by the figures. Contractor availability continued to fall further in May. Although the rate of decline eased to the least marked in 32 months, the gap between supply and demand continues to widen.
All of these factors have helped to consolidate average contractor rates which have risen for the fortieth consecutive month. Whilst the rate of growth has eased from the nine-month high recorded in April, it has remained marked, with contractors in the North enjoying the strongest increase in rates.
Despite recent reports that oil and gas firms are set to make further headcount cuts, engineers are increasingly sought-after, rising up to third in the contractor demand league table from seventh last month.
In light of a slowdown in incoming new work reported by the latest Purchasing Manager’s Indexes (PMIs), the construction sector has slipped to sixth, followed by finance in seventh. Meanwhile, the IT sector has risen one place to eighth.