Job recruitment figures down again
A study by the Recruitment and Employment Confederation also showed a dip in the number of temporary and contract staff - the first reduction in over two years.
Pay rates for temps fell slightly last month for the first time in a year, although pay remained broadly stable for permanent staff.
The report, based on research among 400 recruitment firms, revealed a big increase in the number of people seeking work.
"There are clearly signs of decline but we are nowhere near the lows seen in 2009 when the market deteriorated at a drastically faster rate than we are seeing today.
"Employers are still hiring and using temps in large numbers. However, they are starting the year on a cautious note and are taking their time to make workforce decisions.
"The quicker the eurozone sovereign debt crisis is resolved and we get some economic visibility, the better it will be for employer confidence and the UK jobs market. Overall, the cautiousness in hiring seems to be driven by a lack of confidence in the wider economic situation than a significant downturn in demand."
Bernard Brown of KPMG, which helped with the report, said: "It is a huge concern to see temporary placements falling in tandem with permanent employment opportunities, making it difficult to be optimistic about the employment market in 2012.
"The decline in temporary roles, seen for the first time in almost two-and-a-half years, is a clear indication that businesses are too nervous to even make short-term commitments, given the continued uncertainty across the eurozone and so much talk of a tough year ahead."
© 2012 Press Association