Employers’ confidence in the economy has improved but their hiring plans remain cautious, according to the latest JobsOutlook survey from the Recruitment & Employment Confederation.

The net balance of employers who think economic conditions are getting better over worse grew seven points since March, but remains at negative three, according to the report. Twenty-nine percent of employers think economic conditions are worsening while 26% think they are improving.

Despite the improvement in employer confidence, permanent hiring plans remain on a downward trajectory with only 14% of employers planning increases in the short term, down from 22% at this time last year.

However, more employers are certain about their temporary hiring plans. Just 12% don’t know their short-term plans, down from 18% in March and 34% in February. The survey of 600 employers also found that the availability of temporary agency workers is becoming a bigger problem with 47% of employers believing there will be a shortage of appropriate candidates in any of the sectors they cover, up from 35% last month.

The proportion of employers who increased headcount or pay in the previous year — at 44% and 47% respectively — has been falling since June 2017, likely as a result of the decline in employer confidence since the EU referendum.

“The boosted mood of employers is an important step forward, especially as permanent hiring has been on a downwards trajectory,” said Tom Hadley, REC director of policy. “This more positive vibe will hopefully see more businesses growing their teams and ramping up their hiring plans.”

However, Hadley noted too many employers still feel down about the economy. Even if they want to expand their workforce, they are worried about finding the workers they need, especially for temporary roles. Short-term placements are crucial for jobs that are seasonal or project-based, like hotel staff during holiday season, or construction workers on major infrastructure projects.

“Employers in hospitality, construction and health especially rely on temporary workers from the EU and will suffer if they can’t access them,” he said. “The post-Brexit immigration system has to reflect the importance of temporary staff and ensure that processes are as quick and efficient as possible.”