There were 9% more construction and 6% more manufacturing vacancies in July compared to last year, according to the latest UK Job Market Report from Adzuna.co.uk.

The report also shows that competition for jobs fell to its lowest level for 12 months in July, but the squeeze on salaries tightened. 

While the number of jobseekers has fallen to 2.7 per vacancy in July down from 2.9 in June and down from 3.0 in July last year, the average advertised salary dropped sharply compared to 12 months ago and fell even further behind inflation.

The average advertised salary in July was £33,462p.a., down 3.5% from £34,633p.a. one year ago. In real terms, the average salary has fallen 6.43%, or £2,182p.a., over the past 12 months. The pace of the year-on-year fall in salaries quickened compared to June, when the average advertised salary was 5.6% lower than 12 months previously.

However, the ongoing salary squeeze hasn’t held back job creation over the past year. There were 524,656 job vacancies in July, 1% higher than July 2012, reflecting the improvement in the economy over that period, and the number of vacancies held steady compared to June, defying the usual summer drop.

“A sustained salary squeeze is the dark cloud lingering over a brightening UK jobs market,” said Flora Lowther, head of research at Adzuna. “All other indicators show life is improving for jobseekers. Competition for vacancies is easing, there are more jobs available, and the north-south divide is showing signs of narrowing, but salaries have fallen sharply in real terms. They haven’t kept pace with the relentless march of inflation, which is a major reason why the economic recovery hasn’t been more dynamic.”

Over the past six months, the North East and North West have seen the biggest increases in advertised salaries, outpacing even London. The average salary has risen 1.8% in the North West since January and 1.6% in the North East. London has only grown by 0.9%.