Perm down, Contractors up – RBS/Markit Sep ‘19

Perm down, Contractors up – RBS/Markit Sep ‘19

Perm down, Contractors up – RBS/Markit Sep ‘19

Posted on 8th October 2019

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That, in a nutshell, is the summary of last month’s RBS/Markit report on jobs in Scotland.  However, I suspect you’ll want a bit more meat on the bone, especially as regards the IT industry, so here goes…

First, it’s important to stress that the headline in the September report (noting the “fastest drop … since 2017”) is about permanent placements in jobs.  However, as also noted in the first paragraph of the report, “Temp billings grew sharply, and for the third month in a row, as there were further signs of employers taking on short-term staff to fulfil roles.”  Furthermore, “permanent and temporary candidate availability deteriorated sharply. Falling labour supply continued to place upward pressure on pay. However, vacancy growth slowed in September.”  

Unless you’ve been living in a cave, you’ll be aware that there are some warning signs (inverted yield curves, increasing protectionism/trade wars, falling manufacturing indices, etc.) starting to flash and suggest that a recession is not far away.  That may well be true, and indeed the decline in perm placements highlighted by RBS/Markit would be another indicator, however, we’re still seeing employment growth, in perm and temp, in most sectors, albeit slower than before. Also, bear in mind that the quotes and comments above are based on all sectors, from blue collar to executive and professional, and, as can be seen from the table below (taken from the Markit report) we seem now to have a bit of a gap between those sectors that continue to perform well and those where the decline has been more steep.

Markit Sep 19

A quick glance at the table shows what I mean, especially on the temp side where the month-on-month decline in the bottom four sectors is marked, but the best performing, including IT, are actually not much different from the previous month.  This doesn’t apply to quite the same extent in the perm side of the table, but as you can see, while other job markets are clearly declining (any figure less than 40), IT & Computing is still powering ahead.  This also applies in the temp/contractor market, where our sector is still growing nicely compared to many of the rest.

Overall, there is no disguising the trend in both the temp and perm job markets. Where there is growth, it is slowing, and where there is decline it’s becoming steeper.  Together, these trends do indicate a relative decline in the overall job market, with the prospect of more to come in some sectors.  With Brexit looking ever more likely to be unresolved (I suspect I am not alone amongst MDs in just wanting a timetable for the end-game?), I can see the next few months being fraught for many, even if IT continues to be one of the few that bucks the trend. But let’s not talk ourselves into a recession, and if one is coming then IT will, almost certainly, play a key role in helping us all to dig a way out.  

Nikola Kelly, MD, Be-IT

Posted in News, Recruitment News


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