Employer confidence in the UK economy in May remains in limbo due to uncertainty even after the UK’s date for leaving the EU was postponed, according to the latest JobsOutlook report from the Recruitment and Employment Confederation.

The report found that employer confidence remained close to the record low levels reported last month, with their confidence in the British economy and in making hiring and investment decisions in their own businesses at a net: -29 and net: -3, respectively.

Employers’ intentions to hire both permanent and temporary staff also remained relatively stable compared with the previous rolling quarter’s data. In the medium-term, the balance of forecast demand is net: +18 for permanent staff and increased by 3% to net: +4 for temporary agency workers.

Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, commented, “The Brexit extension has pushed the threat of a “no deal” Brexit into the Autumn, and the ending of our survey’s strong downward trend in confidence reflects this. But it is a temporary reprieve, with businesses stuck in a familiar holding pattern.”

REC’s report also found that 80% of employers reported having little or no surplus capacity in their workforce, such that they would need to take on extra staff if demand increased. This rose to 85% amongst large organisations (250+ employees).

Meanwhile, 45% expressed concern over the sufficient availability of candidates for permanent hire, with Engineering & Technical, Health & Social Care and Construction the three skill areas they reported most concern about.

The two skill areas in which employers reported the highest short-term net demand for permanent staff were Engineering & Technical (net: +25) and Health & Social Care (net: +36).

REC’s data also found that more than half of employers of temporary agency workers (56%) cited their importance in providing short-term access to key strategic skills, an increase of 3% from a year earlier.

“The jobs market is robust, but more businesses remain negative about the future than positive,” Carberry said. “This will only change when they have a greater sense of being able to invest with confidence in the UK – and that comes with securing a sustainable and smooth outcome to the Brexit process.

“Recruiters are working hard to help clients, and delivering great results. But a key part of the post-Brexit settlement must be an immigration system that is open to the skills and labour we need to drive British prosperity. Scrapping the £30,000 salary limit on visas for non-UK citizens would be a big first step to securing this, protecting key sectors including the NHS,” Carberry said.