The jobs market continued on a downward slide in November, according to a joint report by market watcher KPMG and the Recruitment and Employment Confederation (REC).

Despite a surge in candidates looking for a job across all sectors of the economy, due to the increasing number of redundancies and job layoffs, the number of permanent placements available dropped for the eighth consecutive month in a row, according to the Report On Jobs study.

Temporary staff posts also fell at the sharpest rate in the report’s 11-year history, with evidence pointing to the fact that the deteriorating economic climate and ongoing credit squeeze has caused many companies to place recruitment programmes on hold.

To add to the gloom, salaries also reduced for both permanent and temporary employees, shrinking at record rates according to the two organisations.

Kevin Green, chief executive of the REC, said: “These figures confirm that the jobs market has hit the wall. While public sector contracting and interim are faring slightly better, it is now clear the government must not remove the VAT concession on temporary work planned for April as this will destroy jobs when we can least afford it.”

Mike Stevens, head of business services at KPMG, said the UK jobs market is heading downhill at “breakneck speed”.

“The drop in permanent and temporary placements is far steeper and deeper than it has ever been in the survey’s 11-year history,” he said. “Employers in almost all sectors have drastically cut recruitment plans and are shedding contract and temporary staff as fast as they can.

“These people provided flexibility since current employment legislation means it will take some time for solvent businesses to make large numbers of permanent staff redundant.”

Although a few isolated sectors appear less affected than others by the jobs situation, Stevens warned there was no room for complacency.

“It is already clear that this flexibility will be inadequate in the hardest-hit areas of housebuilding, motor retail and certain other retail areas involving larger items of discretionary spend where we are already seeing redundancy plans being announced,” he added.

“It seems inevitable that all but the most resilient areas of the economy will follow suit before long. Even those businesses which can rely on the continued solvency of their customers may need to reassess their business model if they are to retain the skilled workforce which can ensure they prosper when our economy eventually recovers.”