Employers cut spending on temporary staff last month for the first time in more than two years, a survey by an industry body showed on Wednesday, adding to concerns that unemployment will continue to rise.

The Recruitment and Employment Confederation (REC), which represents staff placement agencies, said its monthly index of temporary and contract staff billings sank to 49.0 in December from November's 50.9.

This is the first time the index has been below the 50 mark which separates growth from contraction since July 2009.

It is a huge concern to see temporary placements falling in tandem with permanent employment opportunities, making it difficult to be optimistic about the employment market in 2012, said Bernard Brown, a partner at accountants KPMG, which sponsors the survey.

However, REC chief executive Kevin Green was slightly more upbeat, saying the situation was better than during the depths of the recession in 2009. Demand for nursing, medical and care staff was rising despite public spending cuts, he added.

The government's independent Office for Budget Responsibility forecasts the economy will grow by just 0.7 percent this year. And unemployment - which rose relatively little during the 2008-09 recession - climbed to its highest level since 1994 in the three months to October.

The REC's index for permanent staff placements remained in contractionary territory for a third consecutive month in December, edging up to 48.5 from 48.2.

(Reporting by David Milliken; Editing by Catherine Evans)