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Hiring intentions in the private sector have reached a 19-month high, according to the latest employment index by accountancy firm BDO. This shows that UK businesses are planning to beef up recruitment activities in the next two quarters.
The employment index reached 96.0 in March, the highest since August 2011. Levels above 95.0 indicate employment growth, suggesting that UK businesses will help to offset the effects of expected public sector job cuts.
But UK companies do not expect economic growth in the next six months as BDO indicators show that businesses project economic conditions to remain remain tough at least until mid-2013.
Business confidence increased in the service sector while confidence deteriorated further in the manufacturing sector.
Peter Hemington, Partner, BDO LLP, said: “It is encouraging to see improvement in UK businesses’ hiring intentions, particularly in light of the imminent public sector payroll cuts which will add pressure to the unemployment rate.
“However, the plunging confidence of manufacturers is a particular cause for concern. A fundamental part of the Coalition Government’s “rebalancing” strategy is the encouragement of UK manufacturing. So, it was disappointing to see little action taken in last month’s budget to help this beleaguered sector. In particular, a time limited increase in capital allowances would have been a good step to take in order to encourage the manufacturing industry to invest and grow.”