Young workers will be forced to compete for fewer positions this year, as data suggests that the entry-level jobs market is set to stagnate.

The Institute of Student Employers’ (ISE) Pulse Survey for 2020 showed that employers were planning to recruit just 2.7% more new school-leavers and graduates this year.

However, even this figure could prove optimistic after its research found that student recruiters are failing to hit their targets, pointing to a potential stagnation across the jobs market.

A slowdown in graduate recruitment accounts for the bulk of the decline, though the survey also pointed to a slowdown in hiring of school leavers and apprentices in the months ahead.

The research paints a worrying picture for young adults hoping to secure white-collar jobs across the country and appears to be part of a trend.

Many of the jobs created in the UK over the past decade are too senior for students fresh out of school or university or are low-skilled, requiring little to no training.

Figures collected by the Institute of Employment Studies show that of the 3.4m jobs created over the last 10 years, just 400,000 were classified as skilled and semi-skilled. Around 2.5m were considered professional or senior jobs, and were mostly taken by older, more experienced workers, while about 500,000 were classified as low-skilled.

The Institute of Student Employers said employers were planning to increase graduate recruitment by just 3%, compared with the 18% rise in graduate vacancies predicted this time last year.

Managers also failed to meet student recruitment targets last year by around 3%, it added. If that pattern persists, the graduate market will be stagnant in 2020, marking the worst graduate jobs growth rate since 2016.

While it is not as bleak as the 25% drop in the graduate jobs market seen in 2008/2009, the ISE said it was a sign that employers are hesitant to increase investment in new staff. Stephen Isherwood, the ISE’s chief executive, said: “The graduate jobs market is an early indicator of the health of the economy as employers tend to plan further ahead when deciding their graduate recruitment needs.

“What we’re seeing now is particularly concerning as employers are normally over optimistic at this time of the year. As we move through the recruitment season they typically recruit less than they had anticipated.”

The ISE said that a 14% rise in vacancies in the charity and private sectors was the only saving grace for the graduate labour market overall, which would otherwise be at risk of shrinking this year. This is partly due to the government’s plans to increase spending on policing and the NHS.

Growth in the number of apprenticeship and school leaver programme vacancies also slowed to 2% from 7% last year, suggesting that a spike in openings sparked by the apprenticeship levy may be peaking.

Isherwood said: “Outside the public sector the market is not looking particularly healthy. Government needs to get the economy moving otherwise this year we’ll be in for a stagnant graduate labour market at best. If the government want to see further growth in the apprentice market, they need to address employer concerns about how the apprentice levy works.”