Employers are predicting a drop in hiring rates in the first quarter of 2008, according to the latest Manpower Employment Outlook Survey.

The six percentage point dip in hiring confidence for January to March represents the single largest quarterly fall in hiring plans in the last six years and takes the Net Employment Outlook’ for the first three months of 2008 to +7%.

Manpower’s survey of 2,100 employers across the UK reveals a cautious labour market with 13% of employers planning to take on more staff, 6% intending to make headcount reductions and 80% expected to make no changes to staffing levels. 

Mark Cahill (pictured), managing director of Manpower UK, says:  “The credit crunch, concerns about interest rates and house prices have been talked about for some months, making for a more uncertain time for both employers and employees, and these concerns appear to be reflected in hiring expectations.

“However, it is important to note that the overall picture remains positive – hiring growth is easing but there are still more employers taking on staff than reducing headcount.”

Hiring confidence is strongest in the utilities sector with employers estimating a 17% increase. Meanwhile employer confidence in construction is a down 5%, although the majority of employers in the sector (80%) are predicting a period of stability and report no change in headcount.