Employer confidence in the economy has stabilised in the three months to May after a fall following the EU referendum result a year ago, but it has yet to recover to its pre-Brexit levels, according to the latest JobsOutlook survey by the Recruitment & Employment Confederation.

The survey of 607 employers shows that, in the three months to May, a net balance of +5% think that economic conditions in the country are getting better. This means that 33% of employers felt that UK economic conditions were improving, compared to 27% who thought it was getting worse.

Despite recovering and stabilising following a low of -4% in November 2016, confidence in the economy remains worse than before the EU referendum. In June 2016, just before the Brexit vote, a net balance of +26% was recorded.

The report also shows that the proportion of employers planning to reduce agency worker numbers in the next three months increased to 13% (month-on-month) in May, up from 5% in April and 7% in March. The proportion of employers that suggested that they would be either holding or increasing agency worker numbers in the next three months (87%), when surveyed in March–May, was similar to the last rolling quarter (89%). The percentage of UK employers who highlighted plans to hold or increase their agency headcount in the next 4-12 months remained steady this quarter at 89%

Meanwhile, the proportion of UK hirers planning to maintain or increase permanent headcount over the next quarter remained steady in the three months to May. Furthermore, 42% anticipate a shortage of candidates for permanent hire in at least one skills area and 35% of UK employers state they have no spare capacity within their organisation to absorb more work.

When asked about confidence in their own company’s hiring and investment decisions, employers are more optimistic, with a net balance of +18% saying they expect it to improve according to the report. However, this compares to +31% recorded this time last year.

“One year on from the EU referendum, it is encouraging to see the labour market continue to perform well despite the political and economic turbulence,” REC chief executive Kevin Green said. “Although confidence in the economy has fallen, businesses have held their nerve and delivered record levels of employment in the UK and this should be applauded.”