Confidence in the economy is returning, with just under half of companies in the UK planning to recruit permanent staff in the next three months, according to the Recruitment & Employment Confederation’s (REC’s) JobsOutlook research for October.

While 48% of companies expect their permanent staff headcount to remain the same over the next year, 42% say it will increase.

In the shorter term, 49% of employers expect to hire in the next three months, a drop of 5% from last month’s report, with 41% expecting no headcount growth in the coming quarter.

The figures also showed that with the Agency Workers Regulations (AWR) in place, the number of employers hoping to retain or increase the number of agency workers in their organisation is 82%, only slightly down on last month.

The REC’s director of research, Roger Tweedy, says: “Though the overall scores have only fluctuated slightly over the past month, taken on a three-month rolling basis, there are definite signs that confidence is returning.

“Employers are at last realising they will have to now manage their agency workers slightly differently because of AWR and until their effects are fully realised, employers will continue to err on the side of caution on how they shape their workforces in both the short term and the longer term.”