Hiring and investment decisions curtailed amid Brexit confusion - survey

Employers are scaling back hiring and investment plans as the ongoing Brexit uncertainty rattles confidence, a survey showed on Wednesday.

The Recruitment and Employment Confederation, a trade body, said employers’ confidence in the UK’s economic prospects has dropped by eight percentage points month-on-month, to -28. That is 54 percentage points lower than June 2016, when the referendum on leaving the European Union was held, and the lowest since the survey began.

Confidence in hiring and investment decisions at employers’ own firms declined by six percentage points to -1, the first time the measure has dropped into negative territory since the Brexit referendum.

However, skills shortages meant that more employers planned to increase their permanent headcount than decrease it in the short term, with a net balance +17. Over the medium term, the balance fell slightly but still remained in positive territory at +22.

Neil Carberry, chief executive of REC, said: “A year of falling business investment and weeks of Brexit inertia mean no-one should be surprised that employers’ confidence in hiring for their own business is now dropping.

“For months, businesses have told us that they were concerned about the general outlook for the economy; it is clear to us that this concern is now closer to home. Lower use of temporary labour is a sign of lower demand.”

However, Carberry called the UK jobs market “robust”, noting: “The fact that permanent hiring plans are still positive is a sign that the economy will deliver, if the fog of uncertainty is lifted from British business.”

The REC surveyed 600 employers between December 2018 and February 2019