JobsOutlook: Recovering employer confidence delivers mild good news before the Spring Statement, but much still to do with the overall outlook remaining weak

Businesses hoped for more from this week’s Spring Statement to help them drive growth.

The latest Recruitment and Employment Confederation (REC) JobsOutlook survey of 704 UK employers between December 2024 and February 2025, found that perceptions of how the UK economy was performing were two points higher – at net: -23, compared to the three months to December, though this still represents a weak trend. Confidence in making investment and hiring decisions improved by one point, to net: -4, compared to the three months to December.

This finding continues a very gentle trend of improvements from both the October Budget and the 2022 crash in business confidence. It is important to note, however, that neither measure is yet positive. The previous REC JobsOutlook published in January 2025 signposted that employers' confidence in the economy had slightly increased heading into the new year.

REC Chief Executive Neil Carberry said:

“We have seen business sentiment begin to improve this Spring, though the impact of the National Insurance hike hangs over this like a fog. The story of the rest of this Spring needs to be about supporting the private sector to grow – it is time to build momentum. Too often, the government talks a good game but day-to-day action paints business as the problem rather than the solution. Genuine practical moderation in the Employment Rights Bill, an end to poorly evidenced anti-business sentiment from some large spending departments, and a commitment to genuine partnership that goes beyond good meetings to real action is what is needed. British business wants this government to succeed – but they need to support us to help them do it.”

Survey respondents were optimistic about their intentions to hire short-term permanent staff – especially so in both February 2025, and in the North of England. Employers also felt the most confident about medium-term permanent hiring (the next four to 12 months) in February 2025. Medium-sized organisations (50-249 employees) were clearly the most optimistic about permanent hiring, but it is disappointing that the survey found this optimism limited to England rather than the whole of the UK.

Employers felt more positive about short-term temp hiring (next three months) the longer the quarter went on, with medium-sized employers and larger employers (250+ employees) the most optimistic. When it comes to medium term temp hiring outlook, employers again felt most positive in February 2025 – again with the North and this time the Midlands the most optimistic, along with medium and large firms most optimistic. Again, confidence was subdued outside England.

In contrast to low confidence among small businesses, this latest JobsOutlook shows small employers (0-49 employees) outlook on short-term permanent recruitment at net: +2, and medium-term permanent hiring intentions at net: +1, between December 2024 and February 2025. Small employers’ intention to hire temps in the short-term was net: -5 and net: -1 for hiring temps in the medium term.

But the optimism is tempered only a little by London, often a bellwether for the economy. Employers in the London region’s sentiment on short-term permanent hiring was net: +3, and medium tern permanent hiring was net: +4.2, in the period December 2024 to February 2025. But London employers’ sentiment on short-term temp hiring was net: -3, and the medium-term sentiment on temp hiring was net: -5.