The demand for permanent and IT staff is still falling, according to a new report from KPMG.

But the rate of decline has slowed slightly, the report by KPMG and the Recruitment and Employment Confederation showed.Yesterday IT recruitment specialists Michael Page said it was beginning to hire staff itself as demand slowly increased in key areas like the public sector and finance.

The report uses a figure to represent demand, where anything below 50 indicates a drop on the previous month.

In June, the latest month covered by the research, the figure for IT staff was 43.3. This means there was a decline in jobs, but one that was less steep than the 37.3 figure in May.

The fall was at its worst in March, when the figure for permanent staff was 31.9, one of the most severe declines in the history of the report.

But the ‘Recruitment industry survey’, which analyses data from recruitment firms, also found some good news. Staff with enterprise software management skills were reported in short supply, putting them in a stronger position to find and keep work.

The job situation for temporary staff was also alarming, the report showed. The figure was 42.3, a notable decline in staff demand but a marginal increase on May’s 39.4.

All sectors except the medicine experienced falls in demand. The pattern of IT staff demand, showing a continued fall but at a slower rate, reflected many other areas.

Kevin Green, chief executive at the REC, said public sector recruitment had continued during the period, but added it was “critical that demand returns to the private sector to negate the potential public expenditure constraints that we are likely to see over the next few years”.