The number of jobs for new graduates has shrunk by 8% in a year, suggests a survey of more than 200 top employers.
This is a sharp reversal after four years of growth in graduate jobs, says the Association of Graduate Recruiters.
Some firms are “repackaging” graduate roles as higher apprenticeships but overall the labour market for young people is shrinking, says the AGR.
Brexit is the biggest serious challenge for recruiters, said AGR Chief Executive Stephen Isherwood.
The AGR, which represents blue chip companies and major public sector employers, carries out an annual survey of graduate job vacancies among its members.
This year the 208 firms which responded to the survey had 19,732 graduate positions to fill – compared with 21,427 last year.
By contrast, the 2015 survey showed a 13.2% increase in graduate scheme vacancies compared with the year before.
Detailed figures show vacancies in construction, retail and engineering have decreased the most:
- Engineering vacancies for graduates were down 14% from 2,106 in 2015 to 1,820.
- Retail vacancies fell 16% from 1,975 last year to 1,666 in 2016.
- Construction vacancies were down 11% from 1,266 last year to 1,121 this year.
This year there are more than 10,000 apprenticeships on offer in these companies – a rise 13% on 2015, the AGR calculates, though it also points out that this is still relatively small compared with the drop in graduate vacancies.
Overall the combined number of vacancies for graduate jobs and apprenticeships has decreased 3% on the year, it adds.
“The labour market for young people is shrinking for the first time since the financial crisis, but the composition of the market is also changing as employers invest more in school leaver programmes and apprenticeships,” said Mr Isherwood.
“The uncertainty of Brexit is the single biggest challenge facing recruiters in the year ahead.”
He added that the apprenticeship levy, which from April 2017 will impose a levy of 0.5% on company payrolls to raise £3bn a year to fund three million apprenticeships, was another significant concern for employers.
But, despite the fall in the figures, there are still thousands of vacancies available for university graduates, he said, while “school leavers will find many more different options open to them for high quality jobs”.
The Department for Education said graduates continued to have “stronger employment outcomes, earning on average £9,500 a year more than non-graduates”.
“Last year the vast majority of graduates, 93.9%, were in employment or further study with a consistent increase over the last four years, up 3.6%,” said a DfE spokesman.
“Our higher education reforms are focusing universities on further improving graduate outcomes, by delivering excellent teaching which gives students the skills that both they and employers need.”