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Contractor placements boosted by economic uncertainty: REC Report on Jobs

Contractors are benefitting from economic uncertainty as firms maintain capacity to meet rising demand without leaving themselves vulnerable in the event of an unfavourable outcome in the upcoming EU referendum.

This is according to the Recruitment and Employment Confederation’s (REC) Report on Jobs for March 2016, which shows an acceleration in contractor agency billings, in contrast with a slowing rise in permanent placements.

“Global economic headwinds plus uncertainty around a possible Brexit make it likely that slower growth in permanent hiring will remain over the next few months as employers take a wait-and-see approach,” comments REC director of policy Tom Hadley.

“In contrast, temporary hiring is on the up as businesses seek to meet increasing demand while retaining the ability to react quickly to any threats that might be around the corner.”

Whilst the increase in permanent placements grew at its slowest in six months, contractor agency billings growth rose to a four-month high. Growth was broad-based across the country, although the Midlands again recorded the sharpest increase.

Meanwhile, vacancies continued to rise throughout March, although the rate of expansion was the lowest since June 2013. Similarly, the rate of decline in contractor availability was the least marked in two-and-a-half years. Whilst this indicates that skills shortage pressures are ongoing, pressures appear to be easing slightly.

Core contracting sectors featured prominently in the contractor demand league table. The finance sector rose up to fourth place whilst construction maintained its spot in fifth. IT rose one place to eighth. Meanwhile, the engineering sector fell to the bottom of the table - possibly a reflection of the oil and gas sector struggles.

Despite this, the most recent findings from the REC’s JobsOutlook for March suggest that engineering contractor demand is likely to pick up, with clients expecting to see significant recruiting challenges in this area in the near future.

The favourable market conditions for contractors are also reflected in pay rates. Contractor rates growth during March was the sharpest in three months, having recovered from February’s 33-month low.

Published: Monday, 11 April 2016

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