The growth of employment is still rising but is being slowed by skills shortages, the latest Report on Jobs from The Recruitment and Employment Confederation (REC) and KPMG shows.

The report, published today (Friday), reveals that while permanent staff placements continued to rise in July, the rate of growth has fallen from the recent high in April to the slowest in over two years.

REC chief executive Kevin Green, said:

“While demand for staff remains strong, the labour market is tightening. Alongside long-term problem areas such as technology and engineering, we’re now seeing vacancies such as bricklayers and drivers being flagged as hard to fill.

“The shortage of construction workers is a particular concern. If construction companies don’t have the people they need, both infrastructure projects and house building will be constrained, and this will have an impact on wider economic growth.”

The availability of staff for permanent roles fell further in July, with the rate of decline accelerating to the sharpest since November 2014.

Temporary and contract staff availability also decreased, although the rate of deterioration eased to the slowest in five months. Billings for temporary staff rose at the slowest rate since 2013.

Greed added:

“As students wait in anticipation of A-level results next week, the focus for business and government has to be on making sure that people entering the workforce have the best opportunities to succeed. Businesses need to be prepared to hire staff with potential and invest in their development.

“We need the government to provide more effective careers advice and encourage people to study the right subjects. And while these changes are feeding through into the jobs market, we need a sensible and balanced approach to immigration so that employers have access to the workers they need.”

Compiled of original survey data from recruitment consultancies, the report shows that salary remained strong, despite reaching an 18 month low.