JobsOutlook: Employers’ sentiment on the economy maintains steady but slow recovery

According to the latest Recruitment & Employment Confederation (REC) JobsOutlook, employer sentiment on the UK’s economic outlook improved by four points (to net: -26) when compared to the three months to June – with sentiment steady across the quarter.

But it remains in negative territory going into the autumn. This longer than predicted stretch of economic caution also caused the pace at which firms’ confidence in their own business is improving to moderate a little (to +8). This was particularly driven by a marginal drop in confidence during August.

Overall, the Report shows hiring intentions remain positive for firms. It also shows that SMEs are more optimistic about temp recruitment in the short and medium-term, and some evidence of improving sentiment in London, which is always a labour market bellwether. Turning to temporary labour is a common way of weathering uncertain times for companies.

Neil Carberry, Chief Executive of the REC, said:

“Electing a new government with economic growth as major priority should be good news for businesses and there is some evidence of an improving trend in employer sentiment. But some of the challenges ahead that were widely discussed in August will also be weighing on employers’ minds. Boosting confidence to invest and create jobs – and removing barriers to doing so – should be a priority for the new government as Parliament returns.

“A strong industrial strategy, with the workforce and productivity at its heart, and a pragmatic approach to implementing employment rights reforms will go a long way to boosting business confidence this autumn.”

Compared to the three months to June, a five-point fall in the forecast demand for short-term (next three months) agency workers this quarter left the balance at net: +3. But employers in London (net: +18) and the remainder of the South (net: +16) are most optimistic about temp short-term hiring.

Micro/small (0-49 employees) and mid-sized (50-249 employees) enterprises were notably optimistic about needing short-term agency workers – at net: +20 and net: +18, respectively.

The medium-term (next four to 12 months) outlook for agency worker demand was positive at net: +1 and improved to net: +3 in the last month of the quarter (August). Micro/small (0-49 employees) and medium (50-249 employees) enterprises – at net: +12 and net: +10 respectively signalled for potential hiring in the medium term. London was a buoyant regional outlier at net: +16.

There was an overall fall of just three points this quarter to net: +14 in the permanent hiring outlook for the short-term. But in London 32% of surveyed employers plan to increase numbers, compared to a 19% UK average. In this quarter, the medium-term balance also declined by three points to net: +13.

Ends

Notes to editors:

JobsOutlook is produced by the REC in partnership with Savanta ComRes. Savanta ComRes interviewed 500 UK employers involved in hiring by telephone between 3^rd June and 23^rd August 2024. 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.

Click here to view all REC press releases and for more information and interview enquiries, contact the REC Press Office on 020 7009 2157, 020 7009 2129 or pressoffice@rec.uk.com. Outside of regular office hours, please call 07702 568 829.

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.