Matchtech shares took a bit of a hit last week after the company’s trading update.

As Recruiter went to press, the company’s shares were at a new 12-month low of 164.5p, a 12.5% decrease compared to our previous share table.

Although the company saw net fee income (NFI) grow 8% in the six months to 31 January 2008, when compared with the same period a year ago, it was very much a story of two quarters, with the rate of increase in NFI declining from 13% in Q1 to 3% in Q2.

Adrian Gunn, Matchtech’s group managing director, told Recruiter that the company had felt the effects of the downturn in the automotive sector, as Jaguar and Landrover reduced their headcount. Hiring activity from privately funded projects in the built environment and permanent recruitment in support services also saw falls. Contractor numbers were 5% lower at the end of this January than at the end of July 2008.

But despite what the company described as an “increasingly challenging” economic climate, Gunn said the decline in growth had been “what we were expecting it to be”. Overall, the company had had “a good first half”, Gunn insisted.

Looking ahead, Gunn expressed optimism and suggested the worst might be over. “While there was a step change between Q1 and Q2, there was no step change between Q2 and Q3,” he said. Contract numbers were now stabilising, he explained, while other areas of the business such as training and education, transport infrastructure and publicly funded projects were showing resilience.

Nevertheless, he admitted that uncertainty continued to stalk certain areas of the company’s business, with visibility (ability to forecast revenue) on the permanent side difficult to predict.