According to KPMG's latest report on jobs in the North of England, the North of the United Kingdom experienced its first setback in six years.
Assignments of permanent staff decreased in January for the first time in 77 months. This reduction is the first observed since August 2012 and the fastest since a little over six and a half years.
KPMG said that recruitment agencies have noted a reluctance to hire among their clients due to Brexit-related uncertainty.
Recruitment of permanent staff also declined at the national level in early 2019. Even though it is marginal, the decline was caused by contractions in three of the four controlled English regions. Southern England was the only region to record growth.
Chris Hearld, KPMG UK Northern Regional President for the North, said: "Northern companies may want to hire people, but a chronic labor shortage – especially skilled workers – is starting to be felt. Not only will companies feel underfunded, but they will also see an increase in wage demands, which will put additional pressure on their bottom line.
"The message from the data is clear: the local business community needs to ensure they continue to invest in creating, attracting and retaining talent if they want to remain resilient and competitive."
Recruitment and Employment Neil Carberry, CEO of Confederation, added: "This is the first month since July 2016 when the number of permanent placements has dropped, with lower performance but still positive for temporary positions and the most low growth rate of job vacancies for more than two years.
"But we must be careful not to exaggerate: employment rates are high and the performance of our labor market remains strong overall. We also know that key areas such as accounting, engineering and computer science face shortages. "
Mr Carberry said the survey results were a strong reminder to Westminster and Brussels politicians of the need to provide businesses with insight on how to invest with confidence.
"In the public sector, the NHS is still struggling to find carers and nurses – patients and overworked staff are feeling the pinch," he said.
"Along with other shortages in the sector, this further highlights the need for pragmatism in immigration and a clear transition period after Brexit."
Research has shown that billing from the employment of short-term workers in the North of England also declined for the first time in six and a half years in January. Although recruitment consultants have experienced only a marginal decline overall, the result contrasts with a modest expansion across the UK.
The latest UK-wide increase is the lowest since September 2015, with a capital reduction also weighing on the UK average. The Midlands recorded the fastest growth rate, surpassing the south of England.
Data from the January survey indicated a more moderate increase in demand for permanent and temporary workers in northern England. In particular, vacancies in permanent staff have increased at the slowest pace in 29 months.
Despite solid overall growth, demand grew at a slower pace than at the national level. Short-term positions also rose at the lowest rate since August 2016 and at a slower pace than the UK average.
KPMG said the number of candidates available to fill permanent positions in northern England had also declined in January.
The number of permanent employees has contracted each month over the past six years. The pace of the decline accelerated compared to December, registering the fastest drop since December 2017.
Recruitment agencies indicated that the shortages were mainly skilled workers.