Onrec logo The Online Recruitment Resource

Brexit uncertainty means firms can’t invest with confidence

New data shows that employers’ confidence in the prospects for the UK economy remained negative for the fifth successive month, according to the Recruitment and Employment Confederation’s latest JobsOutlook report. Following last month’s 3 percentage point improvement, confidence levels dropped by a percentage point this month to -12 from -11 in November 2018.

Company Profile

REC

The drop back in employers’ confidence in the economy coincides with confidence in making hiring and investment decisions declining by three percentage points, but remaining firmly in positive territory to a net of +13, the lowest level recorded since April 2018.

61 per cent of employers anticipate economic conditions will be more challenging next year than in 2018, up from 51 per cent when the question was asked in December 2017, showing there has been little or no progress by government to reassure employers, with only 3 per cent of respondents saying that economic conditions will be less challenging in 2019.

Despite this, 47 per cent of employers expect their business to perform better next year than in 2018 and just 9 per cent think it will perform worse. 44 per cent expect their business to perform as well next year as they did in 2018, indicating employers are making plans to respond to adverse economic conditions.

49 per cent of UK employers who hire permanent staff expressed their concern this quarter over the sufficient availability of candidates for permanent jobs, up from 44 per cent a year earlier, with anticipated shortages of hospitality workers causing most anxiety for employers. Engineering & technical, and health & social care workers, were the other two professions where employers expect severest skills shortages. These three professions have been causing most concerns for employers over the last three months.

46 per cent of employers intending to hire temporary workers expressed concerns over the sufficient number of agency workers with the necessary skills they require, up from 35 per cent this time last year. More private sector respondents, 51 per cent, than public sector respondents, 14 per cent, expressed concern. Employers are expecting the most severe skills shortages among drivers for the second successive month, followed by industrial and the marketing, media & creative sectors. These three sectors have been causing most concern for employers over the last three months.

The net balance of employers intending to hire agency staff in the short-term fell by six percentage points from the previous month (November 2018) to a net balance of +13, but significantly higher than in December 2017 when it was a net of +3.

The net balance of those intending to hire temporary agency workers in the medium-term, fell by 6 percentage points from the previous month (November 2018) to a net balance of +10, however it is still higher than a year before when it was at +4.

Neil Carberry, Recruitment & Employment Confederation chief executive says:

“Britain’s jobs market is resilient, but it can’t defy gravity indefinitely. The current uncertainty around Brexit means firms can’t invest with confidence – and that means lower growth and fewer opportunities in future. We must ensure that the concerns flagged in our survey do not lead to a downward trend in our jobs market.”

“In times of uncertainty, flexible working arrangements provide a crucial outlet for employers and workers. The government’s workplace reforms announced this week must be implemented effectively in order to maintain this and find the right balance between flexibility and fairness”.

“Today’s report also underlines key staff shortage areas in our economy, from healthcare to logistics, and from manufacturing to or our world-leading creative industries. As well as upskilling our workforce, the need for an evidence based immigration strategy has never been more pressing. We hope that the government is listening at this crucial and uncertain time for UK business”.

Visit https://www.rec.uk.com/news-and-policy/press-releases to view all REC press releases