PageGroup has warned there is “no sign of improvement” in the group's immediate future, after revealing another significant drop in profits.
Staffing firms have experienced a significant slowdown in trade this year due to heightened economic uncertainty, which is discouraging more companies from hiring workers.
PageGroup said gross profits fell 13.5 percent on a constant currency basis to £201.4 million in the three months to September, following weaker trading across all regions and a disappointing result in the traditionally key month of September.
Challenging times: Staffing firms have experienced a significant slowdown in trade this year as heightened economic uncertainty discourages more companies from hiring staff
In the Europe, Middle East and Africa market, which accounts for more than half of PageGroup's profits, PageGroup's gross profits fell by 15.1 percent to £106.3 million.
Retail was hit by a low number of permanent employees and poor performance in Europe's largest markets – Germany, France and the Netherlands.
Meanwhile, profits fell by 31 percent in Australia and by a quarter in Greater China, where sluggish consumer spending and a depressed real estate sector have slowed the country's economic growth.
UK earnings fell 13.5 per cent to £26.2 million as clients continued to postpone hiring decisions and candidates remained wary of job offers.
PageGroup's results reflect its first half results when gross profits fell 12.4 per cent to £444.1 million due to challenging conditions across all regions. Pre-tax profits also more than halved to £27.7m.
He told investors: “We continue to see difficult market conditions in most of the Group's markets with no signs of improvement.
“As clients have tightened their recruitment budgets, they have become more risk averse, which continues to slow down the recruitment process, impacting time to hire.”
PageGroup's trading update comes three days after fellow recruiter Hays revealed its first-quarter net commissions were 14 percent lower compared to peers.
The FTSE 250-listed company said trading in Germany was affected by “greater exposure” to the country's automotive industry, which has suffered from weaker domestic demand and greater competition from Chinese carmakers.
Like PageGroup, Hays expects market conditions to remain challenging in the near term.
Russ Mould, investment director at AJ Bell, noted that a survey by the British Chambers of Commerce today showed that the percentage of companies looking to hire new staff had fallen to its lowest level in three years.
He went on to say: “PageGroup's problems with global reach suggest this trend is occurring in other parts of the world.
“The company's poor performance in September is particularly disappointing, as this is typically the month recruiters see a rebound from the traditionally quieter summer period.”
Shares in PageGroup were 1.8 percent lower on Monday morning at 363.6 pence, meaning year-to-date losses were around 25 percent.
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