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LONDON: British employers held off from hiring permanent staff in February, adding to signs of growing nerves ahead of Brexit in the country’s otherwise strong labor market, a survey of recruiters showed on Friday.
The permanent jobs index of the survey — produced by the Recruitment and Employment Confederation and accountancy firm KPMG — edged up to 50.0, the dividing line between rising or falling staff levels.
But February’s reading was the second-weakest since the shortly after the Brexit referendum in June 2016 following January’s slump to 49.7.
The cautious start to 2019 and contrasted with strong growth in permanent hirings in 2018 and 2017.
“Overall, the labor market has been incredibly resilient over the last couple of years as employers have opted to hire more permanent and temporary staff rather than invest in long term productivity gains,” James Stewart, KPMG vice chair, said.
Britain’s unemployment rate sank to its joint lowest since 1975 at 4.0 percent in late 2018, a fall that some economists attribute to employers hiring staff rather than making longer-term commitments to investment in new equipment.
“However in 2019 Brexit uncertainty is having an opposite and chilling effect on the jobs market, with firms reassessing their level of risk,” Stewart said.
Britain is due to leave the European Union on March 29 although Prime Minister Theresa May has opened up the possibility of a delay.
Amid the uncertainty, the world’s fifth-biggest economy has shown signs of slowing and the Bank of England expects the weakest growth in 2019 since the global financial crisis, even if May manages to get a Brexit transition deal.
Temporary billings rose at a steeper rate in February after increasing only slightly in January while pay rates for staff generally grew more slowly, the survey showed.
Earlier this week, a survey showed employers in Britain’s dominant services industry cut jobs at the fastest rate in more than seven years. (