Employers say they need to hire more staff to meet demand despite a drop in business confidence after the EU Referendum, according to the latest JobsOutlook survey by the Recruitment & Employment Confederation (REC).

The survey of 602 employers also shows that business confidence has weakened month on month since the EU referendum. In August, 34% of respondents said that economic conditions are “getting worse”, compared to 22% in July and 13% in June.

According to the survey data, 34% of employers surveyed in the three months up to? August say they have no capacity to take on more work without hiring more staff, while 43% say they have only ‘a little’ spare capacity and would need to grow their workforce in order to meet an increase in demand.

Meanwhile, 22% of businesses are planning on hiring permanent staff in the next three months while 4% of businesses expect to decrease their permanent workforce in the same period. Moreover, 25% plan to take on more permanent staff in the medium term (4-12 months).

“With record-high employment in the UK the fundamentals of the jobs market are strong,” REC Chief Executive Kevin Green, said. “Thanks to a resilient business-as-usual attitude from consumers since the referendum, demand on businesses has remained buoyant and this is reflected in employers saying they will actively expand their workforces in the coming months.”

“This is good news, but there are question marks around the sustainability of positive trends we have seen since the referendum,” Green said. “Skills shortages are a major problem in many sectors, one that will only get worse if the supply of skilled EU workers is in any way curtailed. Employer confidence has fallen significantly, suggesting that while businesses continue to perform well, there is much anxiety about what the future holds.

“The government can help to allay these concerns. We hope that fiscal stimulus will be top of the agenda in the Chancellor’s Autumn Statement. That, coupled with an immigration policy designed to help businesses thrive, will improve confidence and bolster the success we have seen so far,” Green said.  

Permanent and temporary vacancies in engineering and tech, construction, health and social care are difficult to fill due to a shortage of suitable candidates. REC data also shows that 27% of public sector employers have made redundancies in the last year, compared to 16% of private sector employers.