The number of permanent and temporary jobs increased last month, but at a slower rate than earlier in the year, showing that public sector cuts were starting to bite, according to new research by recruitment agencies.
The Recruitment and Employment Confederation (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 permanent staff available to work fell in July for the second time in three months, although there was an increase in the number of temporary staff available for work.
Kevin Green, 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 private sector, in particular by reducing business taxation and regulation.
“At the same time, public bodies must avoid knee-jerk cuts to staffing levels which not only threaten the recovery of the UK jobs market but also undermine the delivery of key services.”
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, and is a sign of things to come as the public sector prepares for more spending cuts which are likely to impact the jobs market further.”