Recruitment at record lows as North expected to take brunt of coronavirus economic impact

Recruitment activity in the North of England fell to a record low in April, according to the latest UK Report on Jobs from KPMG and REC.

The findings in the monthly survey showed an unprecedented reduction in hiring at the same time as KPMG data forecasts that almost half of the 10 local authorities to be most affected economically by coronavirus will be in the North.

In terms of GVA forecasts for 2020, the North West is expected to be more severely affected than the North East.

Barrow-in-Furness could lose 28.3 per cent of its GVA this year and is predicted to be the worst affected area in the UK.

By contrast, Middlesbrough and North Tyneside could be among the least economically impacted areas, owing to their high proportion of public sector and healthcare workers, which insulates them to some degree.

Service-based city centre economies, which benefit from workers being able to work remotely, are expected to weather social distancing rules relatively well compared to rural economies that rely on transport, manufacturing, construction and tourism.

In the Northern labour market, both permanent placement and temporary billings fell at the quickest rate on record during April, as business closures and increased uncertainty meant that demand for workers evaporated.

Redundancies related to coronavirus also led to the fastest increase in candidate availability in more than a decade.

Commenting on the results, David Elliott, office senior partner at KPMG Newcastle, said: “As we increasingly come to realise, the world post COVID-19 will be different to the world before this crisis.

“Aside from those businesses experiencing exceptional demand, there has been precious little recruitment in the region during lockdown with many businesses forced to shut their doors temporarily.

“Coronavirus has impacted the private sector across the North and the majority of businesses are now focusing on how best to utilise their existing resources while government measures are eased.

“How quickly firms are able to get their operations back up to speed in the next few months will likely determine the shape of the job market up until the end of 2020 at least.”