Fears of rapid downturn in Yorkshire job prospects as business confidence plunges

A quarterly report by accountancy group KPMG published today reveals the rate of new permanent appointments across the region has slowed to its worst in almost a year, while the availability of workers continues to rise.

At the same time a new survey of firms by recruitment giant Manpower found Yorkshire has the worst employment outlook of any region in England, with more companies looking to lay staff off than take them on.

The Manpower study of more than 2,00 companies – used by the Bank of England and the Treasury as a key economic measure – also confirms a growing North/South divide on the jobs front, with firms far more confident about taking on new staff in the South East, South West and Midlands than anywhere in the North.

The new studies follow a two-day special report by the Yorkshire Post which revealed the scale of the youth unemployment crisis facing the region, with an estimated 100,000 young people looking for work and a hardcore of more than 7,000 youngsters stuck on the dole for more than a year.

While the most recent monthly unemployment figures have seen positive results for Yorkshire, there are now real fears the picture is rapidly changing for the worse.

Chris Hearld, senior partner at KPMG in Leeds, said: “May represented the 10th consecutive month in which permanent employment grew in absolute terms across the region, so it’s not all doom and gloom.

“That said, the slowing rate of employment growth indicates caution on the part of employers, which is hardly surprising given the continuing climate of uncertainty in which businesses are operating.

“The eurocrisis is intensifying, with serious implications, particularly for the region’s exporters which may face a drop in demand from the North’s most crucial markets, coupled with an unhelpful rise in the value of the pound.

These issues are sure to impact on the confidence of local management teams in their ability to recruit.”

Business leaders in Yorkshire echoed KPMG’s view but said it was important to note growth was still happening in parts of the region. Mark Goldstone, of the Leeds, York and North Yorkshire Chamber of Commerce, said: “Our own research draws many of the same conclusions as those of KPMG.

“We have seen a slowdown in companies looking to recruit in the last quarter, most noticeable amongst manufacturers who in Quarter One of this year were in reasonably strong growth mode.

“That said, we are still recording more companies looking to recruit than those who aren’t in our region; so growth, whilst sluggish and inconsistent, is happening.”

Youth unemployment remains the most pressing concern for the region, which now has England’s highest proportion of young people not in work, training or education.

Kevin Green, of the Recruitment and Employment Confederation, warned the picture may well get worse before it improves.

“It’s likely unemployment figures will rise over the next few months as another wave of young people leave education,” he said.

“We have a weakening jobs market which will only improve once demand returns to the economy.”