The latest contraction was slightly softer than August’s five-month record.

The survey, compiled by S&P Global, found clients were cautious in their assessment of the outlook and reluctant to hire staff. Temporary worker billings were also lowered for a third successive month.

Although finding suitable candidates remained challenging, a general expansion of staff availability and reduced demand weighed on permanent salary growth during September.

Latest data showed the weakest rise in salaries for over three-and-a-half years. Vacancy numbers meanwhile declined for an eleventh successive month during September, with falls recorded for both permanent and temporary workers.

Uncertainty in the outlook, including around government policy ahead of late October’s Budget, meant companies were cautious in their hiring activity.

Although there remained reports of shortages in suitable candidates, which helped to boost pay rates, permanent staff salary growth eased again in September. It was the third month in a row that salary inflation has fallen, and September’s reading was the lowest since February 2021, an REC release said.

A greater number of candidates and reduced demand helped to limit pay growth, according to panelists.

The reduction in permanent placements was common across all regions of England. The steepest decline was seen in the South of England, and the smallest in the Midlands.

Fibre2Fashion News Desk (DS)