Employers’ confidence in the UK economy’s prospects dipped dramatically this month and is now at its lowest point in 2018, according to research published by the Recruitment and Employment Confederation (REC) today.
The recruiting body’s latest JobsOutlook report revealed confidence is at the lowest level witnessed since February 2018. The net balance of those reporting a positive rather than negative outlook has hit -14, a fall of 9 per cent since September.
The report found 37 per cent of hiring managers and business owners thought economic conditions were going to deteriorate, while 23 per cent believed they would improve. However, overall confidence in hiring and investment decisions within their own businesses remained stable at +15.
Research by the Confederation of British Industry this week found four in 10 UK employers were ready to trigger contingency plans in the event of a no-deal Brexit, which could involve cutting jobs.
Tej Parikh, senior economist at the Institute of Directors, said: “In order to plan recruitment drives and earmark funds for investment, businesses need stability in the economic outlook. Right now, with Brexit negotiations going down to the wire, clarity on the future path of policy and the economy is a scarce resource.”
The REC research also found almost half (46 per cent) of UK employers who hire permanent staff expressed concern over the sufficient availability of candidates for these roles, with anticipated shortages of health and social care workers causing most anxiety for employers.
The same proportion of employers intending to hire temporary workers were concerned over the availability of agency workers with the required skills.
One part of the workforce which appears to be riding out the negative sentiment is younger workers. Research published yesterday revealed they were experiencing extremely positive wage growth, which was attributed in part to younger part-time employees shifting to full-time roles.
The Office for National Statistics (ONS) found workers aged 16-24 saw median earnings growth of 28.7 per cent compared with the 2015-2016 tax year. This was significantly higher than all other age groups, with those aged 25-29 experiencing a 6.8 per cent rise.
Mark Dawe, chief executive of Learning Providers, said: “These earning figures for young people, and the corresponding ones for apprentices [who have also experienced wage rises], illustrate what an absurd situation we are in as we head towards Brexit.
“As a result of the apprenticeship levy reforms placing barriers in the way of smaller employers, apprenticeship opportunities for young people have almost halved when sectors such as hospitality and care are crying out for home-grown talent to replace the EU migrant workers who are no longer filling vacancies. Ministers have to act now.”
Neil Carberry, REC chief executive, said the upcoming Budget was key: “We need a Budget next week that gives businesses the support they need to drive the economy.”
Holmes added: “The Budget next week is an opportune moment to inject some confidence back into the system. The Chancellor should prioritise giving grants for Brexit advisory support, and targeting reliefs to lower costs and drive productivity growth, particularly in SMEs, to help lift employers’ moods.”