Permanent jobs placements fall again

Permanent job placements in Britain fell for the second month in May and vacancies grew at the slowest pace in five years, a survey showed on Wednesday, in a sign the weakening economy is now hitting the labour market.

The Recruitment and Employment Confederation/KPMG Report's permanent placements index fell to 48.6 from 48.9 in April. The vacancies index fell to 50.8 from 53.0, the lowest in the current 59-month expansionary cycle.

The survey is likely to increase worries that Britain's buoyant labour market is now on the turn as the economy slows down because of a global credit crunch. Many economists are predicting unemployment could rise over the year.

"The credit crunch is continuing to slow job growth," said Kevn Green, chief executive of the REC. "An increasing number of companies are using temps as a way of riding the storm."

The survey showed temporary placements still growing, albeit at a slower rate, while pay grew at a faster rate, perhaps as workers demanded more money to cope with rising inflation.