Professional recruitment firms have reported that the engineering sector has seen a 9% dip, despite average vacancy numbers across the UK having remained broadly stable in the month following the EU referendum.
The latest data gathered from the Association of Professional Staffing Companies (APSCo) found that, despite the UK’s sector-wide vacancy numbers showing 0.2% year-on-year growth in July 2016, there are notable variations between the trade associations core sector groups in terms of hiring activity. The survey shows that permanent vacancies across IT and engineering have both recorded dips (7% and 9% respectively).
Following a steady increase in demand pre-Brexit, temporary and contract vacancies dipped across the professional staffing market in July, with opportunities softening by 2% year-on-year. The clear exception to this is the finance and accounting sector where vacancies increased by 21% in July.
APSCo said that the dip in specific sectors, including engineering, is most likely due to a reluctance to bring on board talent on a permanent basis until there is greater clarity around what Britain’s relations with Europe will look like post Article 50 and how this will impact the operations of multi-national financial institutions moving forwards.
The 9% dip in permanent vacancies within the engineering sector is in line with recent reports from the CBI, which found that the UK’s manufacturing output eased back in the three months to August with 34% of businesses reporting a rise in output and 23% reporting a fall.
APSCo said this fall in confidence may be in response to anticipation of a post-Brexit funding gap, with a large proportion of research and development spend in the sector currently coming from the EU. However, this dip in demand is juxtaposed with a simultaneous increase in average salaries with both manufacturing and engineering recording uplifts of 3.4% and 2.3% as ongoing skills gap, created by a steep retirement cliff, continue to impact the supply of professional talent.
This is in contrast to APSCo’s figures which reveal that median salaries across all professional sectors dipped by 0.8% year-on-year.
Adam Pode, director of research for Staffing Industry Analysts, which compiles the report for APSCo, said: “The drop in the demand in the engineering sector comes as no surprise. The oil industry, which makes up an important part of the sector has seen revenues tumbled 96% from 2014-15 to just £60m in 2015-16, according to government figures. Last year the number of jobs supported by the UK’s oil and gas industry fell by an estimated 84,000 and are forecast to fall by a further 40,000 this year. Separately concerns about commercial construction are also having a negative impact.”