Recruitment giant Hays suffered another steep fall in fee income over the summer as employers kept hiring plans on hold.

Across the group as a whole fees were down 14% in the three months to end September with income from permanent placements 20% lower and the temporary sector hit less badly with a 10% fall.

The UK was particularly badly hit with fees overall down 20%, with temporary down 16% and permanent slumping by 26%. London was down in line with the overall UK market.

At the specialism level, accountancy and finance, and construction and property decreased by 23% and 12% respectively, while technology fell by 32%. Enterprise fees were more resilient, up 1%.

The company, which has suffered a torrid year since a profit warning in January, said in a first quarter trading update: “Activity levels remained subdued but sequentially stable in the private sector. In the public sector, Temp volumes reduced modestly through the quarter.”

CEO Dirk Hahn, said “Net fees in the quarter were down as expected reflecting the tough market conditions, particularly in Perm where we see longer time to hire and low levels of confidence which we expect to continue.

“Given this backdrop, we remain resolutely focused on operational rigour through business line prioritisation, resource allocation, and efficiency initiatives and, due to our actions, group consultant productivity increased by 5% YoY in the first quarter.”

The number of consultants working for the company fell by 2% over the quarter but is 18% lower than a year ago.

Hays warned that it expects market conditions to “remain challenging” with operating profits in the first half of the new financial year “sequentially lower” than those in the second half of last year.