Manpower Employment Outlook Survey Q4 2006

A marked improvement in hiring plans by employers in the Finance and Business Services sector and the London region will lead the UKís end of year hiring plans according to a survey by Manpower. Finance and Business Services firms expect their most bullish fourth-quarter hiring activity since 1997, whilst London employers expect hiring intentions to reach a five-year high.

The details ñ revealed in the latest Manpower Employment Outlook Survey ñ show that nearly one third (31%) of Finance and Business Services employers plan to take on more staff in the last three months of 2006 and just 8% plan to make cut-backs, giving a Net Employment Outlook figure of 23%1 - a significant improvement of 14 percentage points over last quarter and 12 percentage points over last year at this time. The figures for the Finance specific sub-sector are even stronger, with an Outlook of 29%.

London is benefiting from the uplift in hiring confidence from the Finance and Business Services sector, with nearly 4 out of 10 (39%) employers expecting to expand their workforces, and 9% to trim staff numbers ñ an uplift of 17 percentage points from last quarter and a considerable 30 percentage point improvement over last year. The London job market is notably fluid with just 52% of employers not looking to change their staffing numbers over the next three months compared to a UK average of 74%.

Commenting on the results, Manpower UKís Managing Director Mark Cahill said: ìThe Outlook reported by employers in the Finance and Business Services sector and London region are encouraging ñ especially as these two groups reported relatively conservative Outlooks during the summer.

ìThe improved Outlook in the Finance and Business Services sector has a lot to do with confidence in the City, after a dip in the equities market and the spike in oil prices. Alongside increased mergers and acquisitions activity, weíre also seeing an upturn in bonuses. However, there are signs too of wage inflation as firms fight to attract and hold on to quality staff.î

Manpowerís quarterly survey of over 2,100 UK employers measures anticipated hiring activity for the forthcoming quarter. The results for the period October-December 2006 reveal an overall Net Employment Outlook of 11%, representing a quarter-on-quarter decrease of two percentage points (from 13%), but a year-on-year increase of three percentage points (from 8%). When seasonal variations are removed from the data, the Outlook is 9% - one of the most optimistic of the 12 European nations polled.

Less optimistic are employers in the Hotels and Retail sector where hiring plans have dropped by nine percentage points quarter-on-quarter to an Outlook of 5%; and two percentage points weaker year-on-year ñ driven by particularly weak figures from the High Street and Leisure sub-sectors (each 2%).

Comments Cahill: ìHigher energy charges requiring better cost management and an anticipated further increase in interest rates are keeping High Street hiring plans tight. Many firms also increased headcount in anticipation of higher sales pre-World Cup and already have the capacity required for the end of the year. Any hiring made for the festive season will likely be flexible and temporary.î

On a regional level, the UK is split roughly into a North/South divide. Employers in the North report significantly more confidence than those in the South, with the exception of London. Employers in Scotland, the North East, the North West, Yorkshire and Humberside and Northern Ireland all report hiring intentions stronger than the national average, whilst those in Wales, East Anglia, the South East, the South West, and East and West Midlands all report weaker hiring intentions.

Across Europe employment expectations share the UKís positive Outlook, with the strongest hiring intentions predicted in Ireland, Norway, Austria and Sweden, while the weakest fourth-quarter hiring activity is forecast for Italy and France. Notably, employers in Austria, Italy and Germany reported their most optimistic hiring intentions since the surveys began in these countries.