JOB MARKET  KPMG  UNEMPLOYMENT 

UK - Despite rising unemployment in UK, the recruitment industry has reported some optimistic signs in the job market.

According to a survey by the Recruitment and Employment Confederation (REC) and professional services firm and KPMG, the drop in job appointments for permanent staff last month was at its weakest in 13 months.

"I will be surprised if we don't get a positive number next month," says Kevin Green, chief executive of REC.

While economists expect unemployment to rise from its current 2.26 million to more than 3 million next year and joblessness is a lagging indicator, recruitment agencies often pick up early signs of changes in the market.

Since last September, billings for temporary staff have declined at the slowest rate. Permanent job vacancies showed its weakest fall in nine months, while the fall in temporary vacancies was the lowest for eight months. According to RED and KPMG, salaries for permanent staff have continued to fall, but at the slowest rate in six months.

Green predicts "strategic hiring" by some employers if the improvement in the labour market continues, in order to meet specific skills gaps and tap on temporary labour.

Despite the high unemployment rate, some companies are short of skilled staff like internal audit personnel, enterprise software experts and personal assistants.

"Although the rate of decline for permanent and temporary placements continues to slow, it is probably too early to talk about a recovery in the UK jobs market. One reason why we see continued improvements may be that more UK employers are asking staff to work reduced hours for lower pay in return for less aggressive redundancy plans," says Mike Stevens, head of business services at KPMG.

Retaining skills is a priority for employers in this downturn, and they also understood the importance of engaging staff. Green adds that demand should be returned to the private sector to "negate potential public expenditure constraints that could hinder a full jobs market recovery", reports Financial Times.

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