Increased confidence in the manufacturing sector could spell bad news for umbrella company contractors.
The Markit/CIPS purchasing managers’ index for October, published on Monday, showed a 1.4 rise from the 10 month low figure of 53.5 recorded in September.
Employment in the manufacturing sector grew at its sharpest pace since June and export orders rose at their fastest pace since May. The demand for production staff has increased as companies recruit shift managers, team leaders and operators to get goods moving.
The food manufacturing industry in particular is coming up to one of its busiest times of year in the run up to Christmas. But clients are now feeling more confident and looking to permanent hires, said Sarah Frith, a FMCG recruiter at Scantec. Interims were a useful fill in when clients were unsure of the future but that uncertainty seems to have disappeared and even though VAT increases at the start of next year, Frith does not expect many problems in the industry.
The CBI has reported that small manufacturing businesses are expecting a rise in demand and 31% of SMEs hope to boost output between now and January. SMEs have also started increasing their workforce and now plan to invest in innovation and plant and machinery.
And it’s not only the manufacturing sector that is increasing recruitment. The Reed Job Index recorded the largest rise in new jobs since it began 11 months ago. The number of applicants per job has also increased but new-start salaries have dropped. All areas of the UK recorded an increase in vacancies with the South East and West Midlands registering 11 month highs.
As well as the manufacturing sector, demand was high in banking, marketing, financial services and tourism.
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