UK job market ‘weak around Brexit vote’

Recruitment giant Hays has said the UK job market weakened “significantly” around the time of the EU referendum, but it is too early to judge the long-term impact of the vote.

The company also said it had seen “no evidence” of any impact of the vote in markets outside the UK.

Its comments came as it reported an 11% rise in pre-tax profits to £173m for the year to 30 June.

Its profits were driven by strong trading in Asia and the rest of Europe.

In the UK, Hays said net fees were flat, with trading “more challenging” towards the end of its financial year, which coincided with the run-up to the EU referendum.

Conditions were particularly challenging in local government and healthcare markets in the UK.

Hays also said conditions were tough in banking in the City of London, and there were weakening trends in the construction and property business towards the end of the financial year.

Hays chief executive Alistair Cox said: “Following the EU referendum, there is increased uncertainty in the UK market, but we have seen no evidence of any impact elsewhere.

“It is too early to tell what the longer term impact may be and as ever, we will monitor activity levels closely.”

Kean Marden, an analyst at Jefferies, said: “In construction and property, London and larger corporates have been most impacted. To date, Hays has seen no evidence of contagion into Europe.”

“We are mindful that July and August are seasonally quiet months for the industry and September (which can be one of the largest revenue contributors of the year) will provide more meaningful insight.”

The UK comprises about a third of Hays’ business. It employs about 9,200 people across 33 countries.

In the Asia Pacific region net fees grew by 4%, with Australia up 5%, boosted by strong public sector growth.

In continental Europe and the rest of the world, net fees increased by 15%.

BBC