The private-sector jobs market is starting to stabilise while the public sector will face an increasing number of redundancies, according to the latest CIPD Labour Market Outlook survey.

The survey of more than 900 HR professionals found that the pace of deterioration in the UK jobs market is slowing.

Far fewer private-sector firms are expecting to make redundancies over the coming three months than over the previous quarter, and the scale of redundancies will also reduce. While net employment intentions remain negative (they have risen from -30 per cent to -2 per cent since the last quarter), some private industries, including retail and IT, are starting to hire again, marking the first rise in recruitment intentions since the recession began.

By contrast, net employment intentions in the public sector plummeted from -3 per cent to -28 per cent, in anticipation of public spending cuts over the coming months. Redundancies in local government and higher education look to be particularly high, the survey which was compiled with KPMG found. HR professionals in the public sector will also be hit in the next quarter, with 15 per cent of organisations likely to make cuts to the function.

CIPD chief economist John Philpott remained pessimistic: “When it comes to the immediate jobs outlook, the best that can be said is that things are getting worse more slowly. Employment will keep falling and unemployment is still on course to top three million in 2010.”

Philpott also warned that a weak economic recovery or double-dip recession could lead to another surge of redundancies in the private sector later in the year. “While pay restraint or cuts in hours has helped save many jobs that might otherwise have been lost during the recession, holding onto staff when order books are far from healthy pushes up unit labour costs and eats into company profits. This can’t be sustained indefinitely.”

Unemployment has now reached 2.38 million, after the largest quarterly rise on record. New figures are out later this week (12 August).