UK employers concerned for future of the economy

News   •   Aug 24, 2017 15:45 BST

Employer confidence in the UK economy has moved into negative territory, according to the latest JobsOutlook survey by the Recruitment and Employment Confederation (REC). The net balance fell from +6% last month to -3% in the latest report, as a third of employers (31%) now expect the economy to worsen, while only 28% expect it to improve.

On a positive note, employers are still looking to hire, with one in five (19%) planning to increase their permanent headcount in the next three months. Confidence in making hiring and investment decisions remains positive with a net balance of 10%, but is at its lowest for the past year. The study also showed that four in ten (40%) employers have no spare capacity and would need to recruit to meet additional demand.

Kevin Green, Chief Executive at REC, commented: “This drop in employer confidence should raise a red flag. Businesses are continuing to hire to meet demand, but issues like access to labour, Brexit negotiations and political uncertainty are creating nervousness. Employers in the construction sector are especially concerned as they rely heavily on EU workers to meet the growing demand for housing and to support the government’s infrastructure plans.

"The added factor of dropping consumer confidence is putting some businesses on edge. If people reduce their spending, businesses will be impacted. The government must do more to create an environment where businesses have clarity. That means clearly laying out what Brexit plans look like and how employers can keep recruiting the people they need from the EU.