Temp billings growth meanwhile slipped to a three-month low but remained solid overall, according to newly published research.

Redundancies continued to increase the supply of available workers across the region in May but, at the same time, the number of vacancies declined.

With the supply of labour exceeding demand, pay pressures eased, with recruiters recording slower increases in both starting salaries and temp wages in May.

The KPMG and REC, UK Report on Jobs: Midlands is compiled by S&P Global from responses to questionnaires sent to around 100 recruitment and employment consultancies in the Midlands.

May data revealed a fourth straight monthly decline in permanent staff recruitment across the Midlands.

The rate of contraction was little-changed from April and rapid overall.

According to survey respondents, higher business costs and greater market uncertainty, partly due to the war in the Middle East, dampened hiring activity during the latest survey period.

All four monitored English regions except the North of England noted a decline in permanent placements, with the sharpest fall seen in the Midlands.

Billings received from the employment of temporary staff increased again across the Midlands in May, extending the current run of growth to ten months.

According to anecdotal evidence, employers often expressed a preference for temp staff over permanent workers.

Though solid and above the UK-wide average, the rate of expansion was the slowest seen in three months and below the historical trend.

Permanent vacancies fell in the Midlands during May, thereby stretching the current sequence of reduction to two years.

Although the respective seasonally adjusted index ticked up for the first time in six months, it continued to signal a marked rate of decline.

Recruiters across the Midlands noted a deterioration in demand for temporary workers in May.

However, the pace at which temp vacancies fell was moderate and the weakest in the current five-month sequence of reduction.

Nevertheless, the Midlands and the South of England were the only two tracked English regions to register decreases in temp vacancies, with upturns recorded in London and the North of England. 

Meanwhile, Midlands recruiters also registered a further rise in permanent candidate availability during May. Where panellists noted an increase, they primarily linked this to redundancies.

While the pace of growth was sharp, it was the weakest since the current period of expansion began in April 2023 and the softest of the four monitored English regions. The North of England meanwhile recorded the strongest increase overall.

Andy Bostock, Birmingham office senior partner at KPMG UK, said: “May’s figures suggest Midlands employers are still taking a cautious approach to long-term hiring, with uncertainty and higher business costs continuing to weigh on permanent recruitment decisions.

“While temp billings continued to rise, that reflects a market where many businesses are prioritising flexibility over long-term commitment, leaving workers facing greater uncertainty, but businesses better placed to weather a changeable operating environment.

“What stands out is that this shift is happening alongside fewer vacancies, softer salary growth and a continued rise in candidate availability, all of which point to a tougher environment for jobseekers.

“For employers, that may ease some immediate hiring pressures, but it is not yet a sign of a healthy labour market. The broader picture remains one of caution, with businesses holding back on sustained hiring and workers continuing to feel the impact.”