The growth of permanent staff placements accelerated to a 33-month high in December, according to the latest Report on Jobs survey.

The report, published by the Recruitment & Employment Confederation (REC) and KPMG, shows that temp billings rose at the sharpest rate for four months. The index posted a 25-month high of 62.1, up from 61.8 in November. The permanent staff vacancy index rose to 62.3, up from November's 61.9. The temporary staff vacancy index was 59.4, down from November's level of 59.6.

The report reveals that the availability of candidates for permanent jobs continued to deteriorate in December, with nannies, chefs and secretaries in short supply. Meanwhile, temporary/contract staff availability fell for the first time in five months, though the decline was only modest.

The report says that the secretarial/clerical sector had the most demand for permanent staff in the month, followed by engineering/construction and accounting/financial sectors.

In the temporary market, the engineering/construction sector had the most positions on offer, followed by blue collar and secretarial/clerical sectors.

Strong demand for staff and shortages of skilled candidates underpinned a further rise in employee pay during December. Inflation of permanent staff salaries remained close to November's 71-month high, while temp pay increased at a robust pace, albeit the least marked for five months.

Commenting on the latest survey results, Michael Carter, People Services Partner at KPMG, said: "The figures show a strong start to 2007, with permanent and temporary placements continuing to rise in December, and given that demand is growing at the strongest rate for over two years, this type of activity shows no sign of slowing down.

"Within a strong recruitment market, an employer must seek to differentiate itself from its competitors, especially when the figures showed a continued deterioration in the availability of permanent candidates in December.

"As part of being an employer of choice, employers should ensure that employees and potential employees are fully informed of the value of their total remuneration package (including salary and all benefits), so that they maximise their own packages and can be sure that potential employees are comparing like-with-like when deciding which opportunity to take."

Marcia Roberts, REC chief executive, added: "The continued demand for staff and ongoing drop in candidate availability once again highlights the important role that migrant workers coming to the UK play in helping to fill some of these vacancies. This is especially timely within the context of discussion regarding the status of workers from the new EU member states — Romania and Bulgaria.

"At the same time, the increased demand for temporary staff in December once again shows the benefits of a flexible workforce that can help employers cope with seasonal peaks."

A figure of 50 on the report = no change on the previous month's level. Above 50 = an increase; below 50 = a decrease.

The Report on Jobs draws on data provided by recruitment consultancies and employers, as well as data on national newspaper recruitment advertising.