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UK – Employer confidence down for fifth month amid Brexit uncertainty, REC says

19 December 2018

Employers’ confidence in the UK economy was negative for the fifth consecutive month, according to the Recruitment and Employment Confederation’s JobsOutlook report announced Wednesday.

The net balance of those seeing a positive outlook as opposed to a negative one reached -12, compared to -11 in November.

“Britain’s jobs market is resilient, but it can’t defy gravity indefinitely,” REC Chief Executive Neil Carberry said. “The current uncertainty around Brexit means firms can’t invest with confidence — and that means lower growth and fewer opportunities in future. We must ensure that the concerns flagged in our survey do not lead to a downward trend in our jobs market.”

The report found 61% of employers anticipate economic conditions will be more challenging next year than this year, according to the REC survey. That’s an increase from 51% who said the same in the December 2017 survey.

Still, 47% of employers expect their businesses to perform better in 2019 than this year. And while an index measuring hiring and investment decisions fell by three points, its net balance of 13 remained in positive territory.

When it comes to hiring permanent staff, 49% of UK employers expressed concerns there would not be sufficient candidates, according to the report. That’s up from 44% a year ago. Professions where the most severe skills shortages are expected include engineering & technical and health & social care.

Among employers hiring temporary staff, 46% expressed concern over access to the number of workers with required skills, up from 35% last year.

The net balance of employers intending to hire agency staff in the short term fell by six percentage points from November to a net balance of 13. That’s higher than the net balance of three in December 2017.

Looking to the hiring of agency workers in the medium term, the percent of employers hiring was at a net balance of 10, down from November but up from the year-ago balance of four.

“In times of uncertainty, flexible working arrangements provide a crucial outlet for employers and workers,” Carberry said. “The government’s workplace reforms announced this week must be implemented effectively in order to maintain this and find the right balance between flexibility and fairness.”

The REC’s report is based on a survey of 611 UK employees and owners involved in hiring.