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Contracting still the order of the day as UK narrowly avoids triple dip recession

Contracting still the order of the day as UK narrowly avoids triple dip recession

Continued investment in infrastructure projects fuels demand for UK engineering contractors

The UK Government’s continued investment in infrastructure has boosted temporary employment levels across the engineering sector despite the otherwise bleak jobs market. This is according to the latest research by the Association of Professional Staffing Companies (APSCo).

APSCo’s research reveals that whilst both permanent placements and vacancies within the sector continue to fall year on year – 4.7% and 8.6% respectively –the temporary section of the market is faring better.  Temporary placements, for example, have risen by 2% since March 2012 and 1% since February 2013, however there appears to be a regional divide. Looking specifically at online recruitment statistics – provided for APSCo by Innovantage – contract placements in Scotland have rocketed by 33% since March 2012. In contrast, the South East has seen a 15% fall in assignments which is in line with the Government’s National Infrastructure Plan schedule.

Ann Swain, Chief Executive of APSCo comments:

 “Engineering remains one of the few bright spots within the professional recruitment market.  This is being fuelled by initiatives like the HS2 rail link project, Crossrail and the expansion of Heathrow Airport which has created huge demand for highly specialist engineers and project managers.  This vast investment in infrastructure projects has resulted in businesses turning to contract professionals which offers not only a level of flexibility, but also negates the need for permanent headcount cost”.

However Swain warns that with the engineering sector facing a possible retirement cliff, the Government must do more to ensure that the future growth of this sector is not impeded by a skills shortage:

“The Government’s commitment to pump an additional &pound18 billion towards infrastructure projects by the end of the next Parliament – including programmes to improve major highways, upgrade rail links, and develop onshore wind farms – is welcome news for the jobs market. In order to prevent future skills shortages, the UK must look towards encouraging more individuals into the sector before it is too late”.

Whilst the engineering sector continues to improve, the overall picture for the professional jobs market remains mixed with permanent jobs increasingly being replaced with contract roles.  Whilst temporary placements have risen by 5% year on year, permanent placements have fallen by almost 7% which is indicative of a continued lack of employer confidence.

John Nurthen, Executive Director International Development from Staffing Industry Analysts, which compiles the monthly research on behalf of APSCo, commented:

“It’s not surprising given the uncertainty surrounding the economy that employers are rather reluctant to commit to increasing their permanent headcount at the moment. While the latest GDP growth estimate of 0.3% released by the ONS means the UK avoided slipping into recession again by a slim margin, the very fragile growth will not likely lead to much improvement in business confidence.

With the UK economy flatlining for the past 18 months, the use of contingent workers is an essential mechanism enabling employers to react nimbly during such an uncertain period and thereby helps to protect the jobs of the permanent workforce. The UK’s flexible job market at least puts it at an advantage compared to its continental neighbours where the use of temporary and contract labour is still hamstrung by excessive regulation.”


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