UK Employers Maintain Confidence in Hiring Despite Economic Concerns

In a surprising turn of events, UK employers are displaying increased confidence in making hiring decisions and business investments, as reported by the Recruitment & Employment Confederation (REC) JobsOutlook. The period from August to October 2023 witnessed a one-point improvement, reaching a net positivity of +6.

September experienced the most significant boost, with a net confidence level of +8, while August and October maintained more modest increases at net +5. The REC highlighted these figures as potential indicators that measures in the upcoming Autumn Statement could be embraced by businesses to stimulate growth.

This surge in confidence comes against the backdrop of concerns about the overall economic climate, indicating a potential gap between businesses' economic forecasts and their day-to-day operational outlook. Throughout the August to October period, business confidence in the UK economy remained stagnant at -38, suggesting a growing apprehension.

Regarding hiring intentions, demand for permanent workers in the short term (next three months) saw a slight increase to +19. Medium-term (four to 12 months) demand for permanent positions rose by +6 points to +23. Similarly, the forecast for temporary workers in the short term rose by 2% to +10. Notably, recruiters expressed considerable optimism about the medium-term temporary hiring outlook, which surged by 11% to a net positive of +11.

REC Chief Executive Neil Carberry cautioned against expecting an immediate bounce-back in growth, stating, “We are a long way now from this time last year when firms were extremely concerned about the future for their own businesses.” He emphasized the importance of a robust growth strategy, stating, "Falling employer confidence in the wider economy... shows why the chancellor’s pro-business moves in the Autumn Statement are so important."

Carberry concluded by highlighting the anticipation surrounding the spring budget, indicating that employers will closely watch for signs of a cohesive industrial strategy that can further bolster the country's economic prospects. The slow but steady improvement observed in recent months suggests that a sustained recovery may take several more months to materialise.