Despite some positive trends, the Chartered Institute of Personnel and Development (CIPD) believes the UK is set for “slow, painful contraction” of the jobs market, following publication of its autumn Labour Market Outlook report.

The CIPD’s employment index, measuring the difference between the proportion of employers intending to increase total staff count versus those looking to downsize staff numbers, has fallen from -1 to -3 in the report, the second successive quarterly fall.

This negative index figure is driven by the public sector, where the index lies at -50, although this is a marked improvement on the recent -66 level. There is still overall optimism in the private sector, even if the +20 index figure is lower than in previous figures, and in the voluntary sector, where the index reads +7.

Furthermore, the number of firms across all sectors looking to decrease staff headcount has decreased for the third successive quarter, thought it remains high compared to previous reports.

Gerwyn Davies, public policy adviser at the CIPD, says: “The figures point to a slow, painful contraction in the jobs market […] There is no immediate sign of UK labour market conditions improving in the short or medium term.”

The Recruitment & Employment Confederation’s chief executive Kevin Green responded to the figures saying: “We are still seeing strong demand in many sectors and it is important that we do not constantly talk our jobs market down.

“Our longer term outlook [see recruiter.co.uk REC Industry Trends survey shows impressive recruitment recovery, 9 November] remains more upbeat and we have seen a small increase in the number of employers planning to recruit over the coming 12 months.”