New research from the trade body reveals employer confidence in the prospects of the UK economy remains in negative territory.

The REC’s latest ‘JobsOutlook’ report released this morning, shows employer confidence remained negative for a sixth successive month, down two percentage points to net -14 from the previous month and the joint lowest since the Brexit vote in June 2016.

The release of the findings follow last’s night vote in Parliament that saw MPs vote against a proposal put forward by Labour’s Yvette Cooper to delay Brexit in order to prevent the UK leaving without a deal. Although Conservative MP Caroline Spelman’s Brexit amendment – saying that Britain should not leave the EU without a deal – passed in the Commons last night.

REC CEO Neil Carberry claimed the business community is united in wanting a no-deal Brexit off the table: “This avoids significant damage to our economy and helps to restore business confidence.

“The UK jobs market has been incredibly resilient but it cannot defy the effects of deep uncertainty indefinitely. Today’s data shows businesses’ confidence in investing has fallen dramatically – a clear sign of the dampener that ‘no deal’ would put on business growth.

“We’ve been clear. The UK needs a clear transition period and a sensible approach to EU immigration to be written into the deal. That would go a long way to allaying economic fears.”

This latest decline in confidence in economic prospects coincides with employers’ confidence in making hiring and investment decisions falling five percentage points to net +8, the lowest recorded since February 2018 and joint-lowest since June 2016.

Despite this decline in confidence in making hiring decisions, forecast demand for permanent employees in the short-term increased by 7 percentage points and in the medium term by 14 percentage points compared to the same point of last year.

More than half (53%) of UK employers who hire permanent staff raised concerns this quarter over the sufficient availability of candidates for permanent jobs, up from 44% a year earlier, with anticipated shortages of health and social care workers causing most concern for employers. Hospitality and engineering & technical workers were the other two professions where employers expect the most acute skills shortages.

In the short-term, the balance of employer sentiment to hire on a temporary workers was down 10 percentage points from the previous month to +3 and down 4 percentage points from the same time last year. Over the medium term, the balance of employer sentiment towards agency worker hiring fell into negative territory this month, falling 11 percentage points to net -1 from the previous month. This is now six percentage points lower than in the same period last year.

Despite the decline in anticipated demand for temporary agency workers, 47% of employers plan on hiring temp workers expressed concerns over the sufficient number of agency workers with the necessary skills they require, up from 36% last year. Employers expect the most severe skills shortages among drivers for a third month in a row, followed by industrial and education sectors.

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