Hiring confidence to pick up in new year

- Finance & Business Services confidence up
- London jobs market bounces back
- UK confidence third highest in Europe
- Manpower Employment Outlook Survey Q1 2006

UK job prospects look set to improve in the New Year driven by an increase in confidence amongst the Finance & Business Services sectors, according to the latest Manpower Employment Outlook Survey, the most extensive, forward-looking employment survey in the world. London employers are predicting a sharp increase in their hiring plans whilst UK hiring intentions look to be one of the most optimistic of all the 12 European countries polled.

The report shows that the Net Employment Outlook for the period January-March 2006 is 9% - one percentage point higher than the previous quarter ( 8% Q4 2005). The survey, of nearly 2000 employers, reveals that 18% of managers expect to add to their payroll, while 9% expect to reduce staff levels. When seasonal variations are removed from the data, the Outlook improves to 13% - an increase of eight percentage points over the end of 2005.

Mark Cahill, managing director at Manpower, comments: These results should bring some festive cheer for the New Year as they show that hiring confidence has picked up after a cautious end to 2005. Employer hiring intentions are broadly in line with the ten-year average. Itís encouraging that the UK labour market is more optimistic than our European partners: France, Germany and Italy are all reporting flat or negative hiring intentions.

The report shows that eight of the nine business sectors surveyed are reporting a positive employment Outlook. Jobs confidence is particularly notable in the Finance & Business Services sector where 28% of employers are looking to take on more staff and just 8% are looking to reduce their payrolls. This represents a considerable increase of nine percentage points over the last quarter resulting in a Net Employment Outlook of 20%. The survey also shows continued restrained signs from the High Street: just 2% of employers plan to take on more staff - the weakest Q1 results since 2002. Employers in Construction, Transport and Hotels & Retail all expect to recruit at levels below the national average.

At a regional level, 10 of the 12 regions are looking to take on staff. Employers in London are notably confident with 29% of employers planning to take on staff and just 5% expecting to reduce their headcount - the strongest start to the year since 2001. This hiring optimism has improved from both last quarter and year (up 14 and 10 percentage points, respectively). With a Net Employment Outlook of 33%, employers in the North East are the most optimistic of any UK region. Employers in the South East, South West, East Midlands and West Midlands are all reporting figures below the national average.

Mark Cahill continues: With the exception of London, for the second quarter in a row weíre seeing a split between the North and the South of the country. The marked uplift within the Finance & Business Services sector is particularly apparent in London and is indicative of a wider confidence in the City. Such results are positive for the country as a whole: where London leads, other areas of the UK often follow. Confidence in the Capital is likely to be the result of the increase in mergers and acquisitions activity weíve been seeing in 2005.

Companies based in the South continue to expand and invest in the regions - particularly in the North of England - where they can benefit from lower wages and infrastructure costs. Employers in the Midlands seem cautious about hiring, which could be partly attributable to the knock-on effect of the Rover closure and a general downturn in manufacturing fortunes across the region.

Of the 12 European countries surveyed, employers in the UK are the most optimistic when seasonal variations are removed from the data. Employers in Ireland ( 11%), Norway ( 11%), Spain ( 8%) and Belgium ( 8%) are the most upbeat: employers in Germany (-4%), Austria (-2%) and Italy (-2%) are all reporting negative hiring intentions.

Looking at the results from a global level, employers in 20 of the 23 countries and territories surveyed expect to add staff during the first quarter of 2006. Employers in India ( 27%), New Zealand ( 24%), Taiwan ( 22%), Australia ( 20%) and the United States ( 20%) reported the strongest hiring expectations.