London Firms Hold Off on Major New Hires
Poor economic growth in the eurozone, coupled with slowing momentum for the UK economy and uncertainty over the election in May apparently persuaded many London firms to postpone new hires of professionals to the first quarter of 2015, reports Morgan McKinley.
The professional services recruitment firm issued its London Employment Monitor for December 2014, with year-on-year (YoY) figures showing professionals seeking new roles increasing by 51%.
However, month-on-month figures showed professional opportunities down by 37%, while the number of professionals seeking to move also fell, by 23%. Professionals who managed to secure new positions in December increased their salaries by an average of 18%, while the average salary change over the course of 2014 was 18%
In its commentary, Morgan McKinley said that eurozone woes continue to dampen economic confidence as December’s composite purchasing managers’ Index (PMI) fell to 51.4 for the month against an expected 51.7. A figure above 50 indicates expansion, while below 50 indicates contraction.
Neither France nor Italy showed any growth in the month and even Germany (with a score of 52) is showing weakening growth. These figures increase the pressure on the European Central Bank (ECB) to launch a programme of quantitative easing (QE).
The monthly Markit/Chartered Institute of Procurement and Supply (CIPS) showed a loss of the momentum built up in previous months in the UK, with business activity registered at 55.8 in December from November’s figure of 58.6 and the slowest rate of increase for 20 months. However, UK economic growth continues uninterrupted for two years, even at more muted levels.
The disappointing growth rate, coupled with a potential exit by Greece from the eurozone and dramatically falling oil prices, both of which are also resulting in slight market nerves are likely to “fuel worries that the upturn is too fragile to withstand higher interest rates”.
The Markit survey reports “insufficient staff numbers” as an underpinning cause of backlog growth as UK employment in general nevertheless continues to rise for the 24th month in a row. In addition to the difficulties facing the energy sector in the light of plummeting prices, the poor PMI figures, particularly within the UK dominant services sector that showed the steepest decline in three years, are again contributing to market nerves, the firm reports.
“There are a number of contrary currents moving to affect the performance of the economy,” said Hakan Enver, operations director, Morgan McKinley Financial Services. “We see continuing growth for London’s financial sector, but at more cautious rates than might have been predicted a year ago.
“The highly-qualified professional, ideally with technical know-how and international experience, will continue to be a sought-after commodity in the City and we believe London’s pre-eminence as the world’s most important financial centre will continue into 2015.”