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Uk Employers’ Confidence in Economy and Hiring Surges

May 31, 2024

More employers across the UK are feeling positive about the economy, according to the Recruitment and Employment Confederation’s (REC) latest Jobs Outlook.

In the poll of 501 employers, they gave their most positive response about their confidence in the UK economy for over two years. The survey also showed a surge in their confidence in making investment and hiring decisions for their own firm.

Across the February-April 2024 period, the perception of how the UK economy was performing improved by five points, compared to the three months to February 2024, to net: -36. This was the most positive response since February-April 2022, and optimism levels improved across the quarter, registering net: -27 in April.

In terms of employers’ confidence in making investment and hiring decisions, sentiment surged by 12 points this quarter, taking the barometer back into positive territory (net: +5). Confidence similarly improved across the quarter, reaching net: +15 in April.

In contrast to short-term permanent hiring plans, which weakened across the quarter, medium-term (next four to 12 months) sentiment remained relatively static over the three months, but it improved by four points compared to the three months to February. This reflects a heightened level of forecast demand in medium-term permanent hiring among medium-sized organisations, and with sentiment strongest in London (net: +28) and the Midlands (net: +27).

And employers’ sentiment about hiring more short-term temps is up three points in the latest quarter (February-April 2024) compared to the three months to February. And this rise in sentiment is strongest among small and medium size organisations – strongest in London (net: +22) and weakest in the North (net: -3).

Neil Carberry, Chief Executive of the REC, said in a press release, “Evidence is building of a turn in employer sentiment. Firms tend to get more confident about their own prospects long before their view of the wider economy improves, and we can see that in this month’s data. It is still early days in this recovery but drops in inflation and an anticipated summer rates cut will hopefully see employers act against this better outlook. Employers would do well to remember how tight our labour market is – waiting too long to press ‘go’ might lead to them missing key talent in the upswing.”

“As the general election campaign really begins this week, it is encouraging that political parties are talking about employment matters,” Carberry continued. “But they all need to explain how they intend to grow the economy in the labour market context we have now. That means we need to hear much more about plans for an industrial strategy that puts the workforce at its heart and a skills system that does not marginalise temporary workers.”

Sources: ‘Recruitment & Employment Confederation’ and ‘Staffing Industry Analysis’

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