UK employers’ confidence in making hiring and investment decisions increased by 4% in the quarter ended May from the previous rolling quarter, returning to positive territory at net +1, according to the latest Jobs Outlook from the Recruitment and Employment Confederation.

At the same time, the REC’s data showed that employer confidence in the UK economy also recovered slightly from the previous rolling quarter, rising by 3% from -29 to -26.

When it comes to the hiring intentions for temporary agency workers, while the short-term (3-months), UK-wide forecast demand for temporary agency workers improved by 2% this quarter to net: +4, it remained 13% lower than a year earlier.

Forecast demand for temporary agency workers in the medium-term (4-12 months) increased by 1% this quarter, with sentiment back in positive territory at net +5. However, this was still 13% lower than in the same period last year.

The short-term outlook for permanent recruitment stood at net +16, which was at the same level as the previous year. The balance of forecast demand for permanent staff in the medium-term from UK employers was at net +18 in March–May 2019 – 2% higher than in the same period last year.

Nearly half, or 43%, of employers expressed concern over the sufficient availability of appropriate candidates for permanent positions this quarter. The three sectors causing most concern were Health & Social Care, Hospitality and Engineering & Technical. These areas have a legacy of high dependency on non-UK nationals.

Four in five employers (78%) reported having little or no surplus capacity in their workforce this quarter. This included 37% reporting having no extra capacity at all.

Meanwhile, 92% of employers that use recruitment agencies highlighted the importance of an agency’s geographical and/or sectoral expertise when it came to choosing a partner agency, this was up from 71% last year.

REC also found that despite concern over candidate shortages and persistent skills gaps, 74% of employers who use recruitment agencies reported being satisfied with their agency partners this quarter.