The number of new jobs being created in London's financial sector has tumbled by 20 per cent following disappointing quarterly banking results and uncertainty about the markets.
Just 4,030 City jobs were created last month, compared with 5,030 in August 2010, according to figures compiled by financial services recruitment agency Astbury Marsden.
Mark Cameron, the chief operating officer at Astbury Marsden, said: "This is traditionally a quiet time for City recruitment but the summer slowdown has been even more dramatic this year. There have been disappointing second-quarter trading results across all the main investment banks as the effects of the US debt and euro zone crises and general market jitters continue to take hold."
This has forced banks and other financial services businesses, including wealth management firms, to scale back their hiring plans. Mr Cameron believes this is the effect of changes to bonus payouts since the credit crunch.
"It had been far easier for banks and hedge funds to respond to a blip in revenue by simply reducing the amount in the bonus pool," he added. "The current City pay structures – which introduced higher base salaries to counteract lower bonus payments – have meant that City firms looking to lower costs have little option other than to reduce headcount."
The headhunter estimates that there are about 12,700 professionals looking for a new job in the City, down from 12,150 a year ago. Despite the disappointing level of recruitment in August, the number of jobs being created is still far higher than it was after Lehman Brothers collapsed in September 2008 and the markets were plunged into turmoil. In the wake of the crash, the number of new jobs being created fell to below 2,000 a month.
Mr Cameron said: "We are expecting some improvements, albeit not dramatic, during September and through to the end of October as banks and other City firms revert to a degree of normality and start to prepare for 2012." Some staff remain in demand, particularly those who specialise in regulation and risk, as the financial services sector prepares for a new regulatory regime after the Independent Commission on Banking publishes its final report today, and Basel III.
One sector which has a significant number of new job vacancies is engineering and manufacturing, with year-on-year growth of 21 per cent in July, according to the Association of Professional Staffing Companies.
July was the fourth consecutive month that the sector recorded the fastest growth in new job vacancies, but the APSC suggested that heat was coming out of the market.
Property and construction was the second-fastest growing sector, with a 14 per cent boost, followed by IT and telecoms at 6 per cent.
John Nurthen, of Staffing Industry Analysts, which compiled the data for the APSC, said yesterday: "Confidence levels are very volatile and advance or retreat every 24 hours.
"These July figures are less robust than those for June and the effects of the eurozone crisis and mixed messages from the US economy were probably beginning to kick in."Reuse content