UK activity slows down again at recruiter Robert Walters

Russ Mould
10 January 2019

“The slowest rate of growth in UK fees since the first quarter of 2016 at recruitment specialist Robert Walters may raise some fresh concerns over the general health of the UK economy, especially as the FTSE 250 firm continues to thrive in Europe and Asia,” says Russ Mould, AJ Bell Investment Director. “Fee growth in the UK slowed to just 2%, compared to 22% in Europe and 19% in Asia and once more Walters noted that activity in the regions was stronger than in London, despite some signs of recovery in financial services in the nation’s capital.

Source: Company accounts

“Admittedly, jobs data needs careful handling. Employment is really a lagging indicator, because of how long it takes firms to feel confident enough to hire and then go through the process of finding the best candidate.

“It will therefore be interesting to see if Europe starts to show signs of a slowdown, given the fourth quarter’s spotty data from Germany in particular, even if Walters noted revenue growth of more than 25% from the EU’s economic engine in the final three months of the year. The recruiter also flags record performances in France and also Belgium, even though the latter’s Courbe Synthétique industrial sentiment indicator started to soften again as 2018 drew to a close.

“Investors don’t appear too concerned by Walters’ fourth-quarter update, as the shares are up a touch, and this may reflect how the UK fees still grew by 2% against a tough comparison last year, when fourth-quarter fees rose by 13% year-on-year.

“Investors’ and economists’ attentions will now switch to next week’s updates from PageGroup and Hays, as their last quarterly updates had shown some signs of improvement in their respective UK businesses.”

Source: Company accounts

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