Confidence in economy drops again but employers are “showing resilience” – REC

Employer confidence in the UK economy has dropped to the lowest level since the EU referendum, according to the latest JobsOutlook survey by the Recruitment & Employment Confederation (REC).

Thirty-three per cent of employers believe that economic conditions are getting worse, while 26 per cent think economic conditions are improving. The net balance fell further into negative territory, from -3 last month to -7 in September.

Despite falling confidence in the economy as a whole, confidence in hiring and investment decisions remains positive at +10 per cent, showing no change from last month. Hiring intentions are also stable, with one in five (19 per cent) planning to increase permanent headcount in the next quarter.

The latest JobsOutlook survey of 600 employers also shows:

  • six in ten (59 per cent) say that agency workers are important to responding to growth
  • more than a third (36 per cent) expect to find a shortage of temporary agency workers to meet their needs
  • a shortage of temporary workers is expected in the construction sector in particular
  • a shortage of candidates to fill permanent health & social care roles is anticipated

REC chief executive Kevin Green says: 

 

“Employers are showing a great deal of resilience as they continue to hire despite a growing number losing faith in the direction the economy is heading. The political climate isn’t helping the situation. Businesses need clarity in order to plan effectively and so far the Brexit negotiations have not resolved any of the core issues.

“Employers are worried about how they will fill vacancies in the future. There are now just 1.9 unemployed people for every vacancy, and net migration from the EU is falling, which means the pool of people available to employers is shrinking.

“Businesses can only grow if they have access to the people and skills they need. With party conference season in full swing, we urge politicians of all sides to heed the warning signs and create clarity for business. That means making progress in the ongoing Brexit negotiations.

“An early agreement on the settlement of EU nationals already working in the UK would be a step in the right direction. The vast majority of EU nationals residing in the UK come here to work and make a valuable contribution to our economy.”

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