UK jobs market ‘can’t defy gravity indefinitely’

Brexit uncertainty is hitting employer’s confidence to hire, according to the latest ‘JobsOutlook’ report from the Recruitment & Employment Confederation.

This latest month’s report, released this morning, finds employers’ confidence in the prospects for the UK economy remained negative for the fifth successive month – with confidence levels dropping by a percentage point this month to -12 from -11 in November 2018.

This coincides with employer confidence in making hiring and investment decisions declining by three percentage points, albeit firmly in positive territory to a net of +13, the lowest level recorded since April 2018.

The findings also reveal:

  • 61% of employers anticipate economic conditions will be more challenging next year than in 2018, up from 51% when the question was asked in December 2017, while just 3% expect economic conditions will be less challenging in 2019
  • 47% of employers expect their business to perform better next year than in 2018 and just 9% think it will perform worse
  • 44% 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% of UK employers who hire permanent staff expressed their concern this quarter over the sufficient availability of candidates for permanent jobs, up from 44% 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
  • 46% of employers who plan to hire temporary workers expressed concerns over the sufficient number of agency workers with the necessary skills they require, up from 35% this time last year. Employers expect the most severe skills shortages among drivers for the second successive month, followed by industrial and the marketing, media & creative sectors
  • 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.

Commenting on the findings, REC CEO Neil Carberry said: “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.”

“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.”

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