Employers’ confidence in the economy at its worst for eight months

New data shows that employers’ confidence in the prospects for the UK economy plummeted this month, according to the Recruitment and Employment Confederation’s latest JobsOutlook report. The net balance of those seeing a positive outlook as opposed to a negative one hit -14, a fall of 9 percentage points from last month (September 2018), and the lowest level witnessed since February 2018.

Despite the lowest confidence in the prospects for the economy since the start of the year, employers’ confidence in making hiring and investment decisions in their own businesses remained in positive territory with a net balance of +15, the same as the previous three months.
46 per cent of UK employers who hire permanent staff expressed their concern this quarter over the sufficient availability of candidates for permanent jobs, with anticipated shortages of health and social care workers causing most anxiety for employers. Engineering & technical, and hospitality workers, were the other two professions where employers expect severest skills shortages.
Similarly, 46 per cent of employers intending to hire temporary workers expressed concerns over the sufficient number of agency workers with the necessary skills they require. This is up from 39 per cent this time last year. Employers are expecting the most severe skills shortages among drivers, followed by the marketing, media & creative, and industrial, sectors.
The net balance of employers intending to hire agency staff in the short-term rose by 25 percentage points compared to this time last year, to a net balance of +16. The net balance of those intending to hire temporary agency workers remained buoyant in the medium-term, rising by 14 percentage points compared to the same period last year, to a net balance of 0.
Neil Carberry, Recruitment & Employment Confederation Chief Executive says:
“With employers’ confidence in the prospects for UK economic growth diminishing, we need a Budget next week that gives businesses the support they need to drive the economy. Getting the tax system right is a priority, but hasty changes to contractor tax with Brexit on the horizon will lead to further stress on UK businesses – especially as the Chancellor’s experiment with this in the public sector is yielding mixed results.
“Completing the employment status review and prioritising the restructuring of the apprenticeship levy to make it an effective skills policy not just a tax should be a key priority for the Government. Getting this right will help underpin job creation in our flexible labour market during these times of change.
“UK businesses continue to drive growth by expanding their workforces. Recruiters are playing a vital role in helping employers to plug the labour shortages in their businesses. This is even more important while they make contingency plans for what a deal or no deal Brexit scenario will bring.”

 

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