Further evidence of a "jobless recovery" arrived with results from the recruitment agency Harvey Nash, which said yesterday that employers were yet to start hiring.
Although business confidence was improving, the company saw little sign of an upturn in demand for permanent staff, with the exception of some IT jobs, and added that this weakness would damage its fourth-quarter trading and its results for the full year. In the three months to 24 November the company said trading was significantly weaker than in the same period last year, with revenues falling 23 per cent and adjusted pre-tax profits down 72 per cent. It forecasts second half performance will be broadly in line with its first half.
ONS data suggests that the market for part-time and temporary work is much healthier than that for traditional full-time permanent positions, though vacancy rates in sectors such as construction and manufacturing are improving.
The group said: "Although we continue to see increased demand for our IT outsourcing services, it has now become clear that positive sentiment is not yet resulting in increased demand for permanent recruitment.
"Accordingly, we expect that this will materially impact the group's fourth-quarter trading and therefore the result for the full year."
While the labour market appears to be stabilising with unemployment at about 2.5 million, or 8 per cent of the workforce, many economists believe that the likely growth in the economy will be insufficient to bring it down very rapidly. The Organisation for Economic Cooperation and Development has predicted that "the economic recovery now spreading across OECD countries is still too timid to halt the continuing rise in unemployment".
Harvey Nash saw its revenues fall by 23 per cent in the third quarter as the usual seasonal upturn failed to materialise. However, Harvey Nash said it still expects to remain profitable despite the deterioration in revenues. The group has UK offices in Birmingham, Leeds, Edinburgh and London.