The undisputed strength of the UK economy since the financial crisis has been the jobs market.
The employment rate currently stands at 76.1%, the highest since comparable records began in 1971, while the jobless rate of 3.8% is the lowest since 1974.
And the ranks of the economically inactive, those people between 16-64 who do not have a jobs but who are not classed as unemployed because they have not been actively seeking work within the last four weeks, are also at their lowest since 1971.
It is a truly impressive record.
Increasingly, however, economists are starting to wonder whether this is as good as it gets for the labour market.
PageGroup said that, during the three months to the end of September, its UK gross profits fell by 4.1% to £33.8m with “heightened Brexit-related uncertainty now impacting candidate and client confidence at all levels”.
Steve Ingham, the chief executive, said the company had seen “increasingly challenging trading conditions” in many of its larger markets, including Greater China, the UK and France.
He added: “Looking ahead, the deterioration in trading conditions seen during [the third quarter] across the majority of our regions is anticipated to continue.
Shares of PageGroup have fallen by just under 12% on the news, taking them to a level not seen since December 2016, while clipping £162m from the company’s stock market value.
Robert Walters, the company’s Brexit-supporting founder and chief executive, added: “The ongoing uncertainty surrounding Brexit, the US-China trade tariff stand-off and Hong Kong protests, coupled with the significant impact of the gilets-jaunes protests experienced [in France] earlier this year, have combined to create a unique set of cumulative headwinds.”
The twin warnings appear to confirm the findings of a survey published today by the Recruitment and Employment Confederation (REC) and the professional services firm KPMG which said that, in September, permanent staff appointments fell for the seventh month in a row while with overall job vacancies rose at their weakest rate since January 2012.
James Stewart, vice chair at KPMG, said: “The Brexit impasse continues to affect the jobs market with employers stuck, unable to make informed decisions, and people unwilling to risk seeking new roles.
“Given that it’s the weakest increase in job vacancies since 2012 and the longest period that permanent staff appointments have fallen since the global financial crisis, it would seem that it’s proving difficult for businesses to shake off the heightened uncertainty and unknowns.
“So with the deadline fast approaching, they may well be waiting to get clarity on the future direction of Brexit before making any key decisions on hiring and investment.”
Taking all these facts together and it suggests that, while businesses await to find out what kind of Brexit agreement – if any – the UK will get on leaving the EU, they are putting recruitment on hold.
But there are a few points to make about these various pieces of evidence.
The first is that it is important to stress that PageGroup and Robert Walters are global players and are not just seeing a slowdown in the UK – although that does appear to be where the weakness is most pronounced – with storm clouds also gathering in Germany, another market where employment is at an all-time high and Hong Kong, where the recent civil rights protests have had an impact on the economy.
July 2019: Greg Clark says no-deal Brexit would kill ‘many thousands of jobs’
The wider picture is that, where employers have no option but to fill a vacancy immediately, candidates for those roles are in a strong position.
“Notably, starting salaries rose at a sharp and accelerated pace.”
In particular, the IT Computing and Hotel Catering sectors both saw a big increase in vacancies during September, with only the benighted retail and construction sectors seeing drop-off in vacancies.
And, should the weakness in the UK labour market persist, there might even be a positive knock-on effect.
The flip side of the UK’s post-crisis jobs miracle has been a marked weakness in productivity.
Unlike countries such as France, where the least productive workers languish on the dole queue, the UK prefers that its least productive workers actually stay in work.
Longer term, as pay rises have to be paid for ultimately by improvements in productivity, that also ought to be positive for the wages of those people in work.