Eurozone crisis impacts on Michael Page

The warning raises the spectre of further bad news from the 17-country euro area, where unemployment is already running at 11.4 per cent of the working population, as staffing firms are viewed by analysts as indicators of future economic trends.

“Everybody expected that EMEA (Europe, Middle East, Africa) would turn down, that’s not in dispute. What we’re seeing in Michael Page is that it appears to be turning down ahead of everybody else,” said Shore Capital analyst David O’Brien.

Smaller rival Robert Walters last week posted a 1 per cent rise in third-quarter gross profit.

Michael Page, which makes just under 40 per cent of earnings from the EMEA region, said group gross profit dropped 11 per cent year-on-year to £126.5m in the three months ended September.

That included a 16 per cent fall in the EMEA region, which excludes Britain, and drops of 22 per cent in both Italy and Spain, the biggest countries engulfed in the debt crisis.

The eurozone has endured around three years of financial turmoil, and while markets have recently been reassured by the European Central Bank’s pledge to buy government bonds, there are few signs of economic growth picking up.

“You only have to look at the headlines around Europe to see that it’s not exactly a happy place,” Michael Page chief executive Steve Ingham said, adding a lack of confidence in the region was impacting companies’ willingness to invest in new projects such as factories and laboratories.

“I don’t panic as a result of us being down by what I regard as a small amount in the quarter,” he added.

Michael Page, which makes over 40 per cent of its profit from the finance and accounting industries, said it expected full-year operating profit to be slightly below analysts’ current forecasts, which are pitched around £67.7m.

More than three quarters of Michael Page’s profit derives from placing people in permanent jobs, which, compared with the temporary market, is more affected by uncertainty as companies put off making longer term deci- sions.