Hays sees signs of life in the jobs market

Chief executive Alistair Cox hailed a return to fees growth in the second half of the year to June 30 and said the outlook was improving "across 90 per cent of our markets".

Net fees over the year as a whole were down 21 per cent to 557.7m, however Hays – which now generates more than half of its business overseas – said 20 countries grew fees more than 10 per cent in the last quarter.

But in the UK and Ireland, public sector net fees – which account for around 30 per cent of its business – were down 19 per cent year-on-year and are now more than a third below peak levels as spending cuts begin to pick up pace.

While healthcare and education performed well, fees from construction, property and back office jobs were hit hard due to the pressure on the public finances, and Hays is shifting resources towards private sector recruitment.

City experts voiced concerns over the impact of the looming spending review.

Seymour Pierce's Caroline de La Soujeole said: "We believe that concern over Hays' exposure to public sector spending cuts will continue to act as a drag on share price performance in the short term."

Steve Woolf at Numis Securities added: "The weakness is currently confined to back office public sector, but we believe that a broader impact lies ahead."