JobsOutlook: Employers' confidence in their businesses rises despite slow economic growth

In good news for the UK economy as we head towards 2024, employer confidence in investing and hiring in their own business seems to be growing month on month. Confidence in making decisions improved by one point over the period August to October 2023 (to net +6), following a brief decline in the previous reporting period. September saw the largest increase (to net +8), whereas August (net +5) and October (net +5) were more modest.

Given the focus of policy makers on getting business investment going to drive growth, these numbers should be seen as evidence that the potential exists for measures in the Autumn Statement to be taken up by firms.

And that extends to hiring too, where demand for permanent workers in the short term (next three months) rose slightly to +19. Medium-term (four to 12 months) permanent demand rose by +6 points to +23.  In addition, the forecast demand for temporary workers in the short term also rose by two percentage points to +10. Recruiters seemed highly optimistic about the medium-term (four to 12 months) temporary hiring outlook – up by 11 percentage points to net: +11.

This positivity is set in contrast to concern about the wider economy – suggesting that a gap is emerging between the picture businesses have of the wider economy and their own day-to-day work. In the period running from August to October 2023, business confidence in the UK economy remained at a similar level (-38), indicating an ongoing increase in concern.

Neil Carberry, Chief Executive of the REC, said:

“We are a long way now from this time last year when firms were extremely concerned about the future for their own businesses. Growing confidence in investing and hiring is a leading indicator of better performance – but we should be cautious in expecting growth to bounce back in the short-term. This steady but slow improvement will take several months to bear fruit, as shown by our data on firms’ views of the wider economy.  

“Falling employer confidence in the wider economy, and not great broader consumer expectation for the economy, shows why the Chancellor’s pro-business moves in the Autumn Statement are so important. But it needs a powerful growth strategy to back it and really boost our economy. Employers’ attention will now turn to the Spring Budget to watch for a more cohesive industrial strategy. We’ve already seen in decisions made in the past week – like the investment by Nissan in Sunderland - that joined-up thinking on regulation, R&D, skills and devolution makes a huge difference.” 

Ends

Notes to editors:

JobsOutlook is produced by the REC in partnership with Savanta ComRes. Savanta ComRes interviewed 501 UK employers involved in hiring by telephone between 2^nd August 2023 - 17th October 2023. Data were weighted to be representative of UK adults in employment by region, broad industry sector and public/private split. Savanta ComRes is a member of the British Polling Council and abides by its rules. Data tables are available at www.comresglobal.com.

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The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.

Find out more about the Recruitment & Employment Confederation at www.rec.uk.com.