Jobs total up, but slower as public sector cuts bite

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The number of permanent and temporary jobs increased last month, but at a reduced rate than earlier in the year, showing that public sector cuts were starting to have an effect, according to research by the Recruitment and Employment Confederation (REC).

The REC said there had been a "significant" deceleration in the jobs market, with the rate of expansion easing to an eight-month low.

The most in-demand jobs were in the engineering and construction sectors. The number of people available for permanent positions fell in July for the second time in three months, although the number of people available for temporary work increased.

Kevin Green, the chief executive of the REC, said: "This is the first real indicator that cuts in the public sector are beginning to bite. Nowhere is this more apparent than in nursing and medical care, where demand for both permanent and temporary staff has fallen away drastically, compared to last year, when it was the only sector experiencing growth.

"With 600,000 job cuts forecast in the public sector over the next year, the Government must do everything possible to boost job creation in the private sector, in particular by reducing business taxation and regulation."

Bernard Brown of KPMG, which helped with the report, said: "The UK job market continued to slow down in July with overall demand for staff rising at the slowest pace in eight months.

"Surprisingly, engineering and construction is the sector where staff were most in demand: an indication of a sustained recovery in the manufacturing sector. However, the sharp decline in the demand for healthcare professionals comes as a direct result of government cutbacks and cost reduction in the NHS."