Uncertainty is impacting staffing decisions in the UK as 35% of employers think that economic conditions in the country are getting worse, while 21% say they are improving, according to the latest JobsOutlook survey from the Recruitment & Employment Confederation (REC).

The JobsOutlook survey, which polled 600 employers, showed that the net balance of confidence in hiring and investment decisions has fallen to eight, which is the lowest since the referendum.

Meanwhile, uncertainty about agency worker hiring intentions increased by 7 points this quarter, with 34% unsure about their short-term hiring plans. When looking at medium-term hiring plans (4-12 months), 32% said they are uncertain about agency worker hiring. This was higher than the 25% in the previous period.

For permanent recruitment, 18% of employers plan to increase permanent staff in the next 4 –12 months, down from 23% in February 2017. Meanwhile, 18% don’t know their plans, up from 10% in February 2017. In the short-term (3 months), 12% did not know their plans, which was an increase of 5% from last year. Amongst UK employers that had clear plans in the short-term, 17% planned to increase numbers whilst just 2% planned reductions in numbers.

The survey also showed that large employers (250+ employees) are especially affected as almost half (47%) are not sure if their organisation will increase or decrease their number of agency workers in the next three months. This is up from 40% last month and from 18% in February last year.

“Employment has been rising for the past year. However, we are now seeing that businesses are starting to feel hesitant about hiring,” REC chief executive Kevin Green said. “This might indicate the impact the current political and economic uncertainty has had on employer confidence. Instead of thinking ahead, businesses are likely to make more ad-hoc decisions about recruitment. The shrinking number of candidates doesn’t help with this as employers continue to struggle with labour and skills shortages.”