UK employers’ confidence in making hiring decisions and investments improved by one point from August to October 2023, reaching a net score of +6, according to the latest Recruitment & Employment Confederation (REC) JobsOutlook.
September witnessed the most significant monthly increase, reaching a net score of +8, while August (net +5) and October (net +5) showed more modest improvements.
The REC commented, “Given the focus of policymakers on stimulating business investment to drive growth, these numbers should be considered as evidence that the potential exists for measures in the Autumn Statement to be embraced by firms.”
This positive trend occurs amidst concerns about the overall economy, indicating a potential gap between businesses’ economic forecasts and their day-to-day operational outlook. During the August to October period, business confidence in the UK economy remained at a similar level (-38), reflecting a persistent increase in concern.
The demand for permanent workers in the short term (next three months) slightly increased
Regarding hiring, the demand for permanent workers in the short term (next three months) slightly increased to +19. Medium-term (four to 12 months) permanent demand rose by +6 points to +23.
Additionally, the forecasted demand for temporary workers in the short term also increased by 2% to +10. Recruiters displayed high optimism about the medium-term (four to 12 months) temporary hiring outlook, which rose by 11% to a net score of +11.
REC Chief Executive Neil Carberry stated, “We are now a long way 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.”
Carberry emphasised the importance of a strong growth strategy, saying, “Falling employer confidence in the wider economy, coupled with less optimistic broader consumer expectations for the economy, highlights why the chancellor’s pro-business moves in the Autumn Statement are so crucial. However, it needs a powerful growth strategy to support it and truly boost our economy. Employers will now shift their attention to the spring budget to observe a more cohesive industrial strategy.”