Job market shows further improvement

The number of people placed in permanent jobs in Britain rose in February at its fastest pace since July 2007 while salaries rose at the fastest pace in almost two years, a survey showed on Wednesday.

The REC/KPMG index of permanent placements by recruitment agencies rose to 63.2 last month from 60.5 in January - the seventh month running that it has been above the 50 level that separates growth from contraction.

The index of temporary staff placements slipped back however to 57.9 from 59.0.

Average salaries for permanent staff rose for a fourth consecutive month, the survey showed, with the index rising to 54.1 from 53.0 in January. The salary index for temporary staff was little changed at 50.3.

"The UK job market is continuing to improve," said Kevin Green, chief executive of the Recruitment and Employment Confederation. "High-end sectors such as IT are showing particularly strong growth and we are also seeing significant increases in demand for administrative and back-office support."

But the labour market recovery could be stifled by cutbacks in public sector jobs expected after this year's election to tackle the government's ballooning budget deficit, said Bernard Brown, KPMG's head of business services.

"The impact of the inevitable public-sector recession on the jobs market has yet to be felt and will be played out over the next six to 12 months," he added.

Source Reuters: Reporting by Christina Fincher