Job growth slips for second month in May

A man walks up steps in the City of London, January 25, 2010.

LONDON (Reuters) - The rate at which British recruiters filled permanent jobs slipped for the second month running in May after hitting a 12-year peak in March as public sector cuts began to take effect, a survey showed on Wednesday.

The Recruitment and Employment Confederation (REC) said its permanent placements index fell to 61.3 in May from 63.2 in April and 65.2 in March, its highest level since October 1997.

Index levels above 50 indicate net hiring among the panel of 400 recruitment companies polled each month for the survey.

Billings for temporary work increased in May to stand at 59.2, compared to 58.7 in April and 60.9 in March.

REC's Chief Executive Kevin Green said there was strong demand for accountants, software developers and human resources staff, but fears were growing about the outlook for the public sector.

"Job vacancies continue to grow but at a slower rate than previous months," he said. "However, we remain concerned about the overall employment outlook as public sector recruitment freezes start to bite."

Britain emerged from its worst recession since World War Two late last year and Prime Minister David Cameron has warned of painful cuts ahead as his new government tries to cut a budget deficit running at around 11 percent of GDP.

An emergency budget due on June 22 is expected to contain details of wide-ranging public sector spending cuts, including job losses and hiring freezes.

Accountants KPMG, who sponsor the survey, said hiring in the public sector had already started to slow down.

"Many public sector employers will have imposed embargoes on recruitment at least until we get more details of further cuts in the emergency budget," said Bernard Brown, partner and head of business services at KPMG.

(Reporting by Peter Griffiths; Editing by Susan Fenton)