Employers more positive about business prospects

In April-June 2023, employers’ confidence in making hiring and investment decisions for their own businesses continued to rally. A net balance of +7 showed more businesses growing in belief than those who were doubtful.

The metric moved into positive territory in the Spring for the first time since early 2022.

Businesses’ views on the wider economy also improved but remained negative overall at a balance of -41; while 19% of respondents said thought economic conditions were getting better, 60% thought things were getting worse. In November 2022, this index stood at -70.

A higher-than-normal number of businesses answered “don’t know” to questions on hiring plans – perhaps reflecting doubt over this contrast between firms’ view of their own prospects and the wider economic picture.

Neil Carberry, chief executive of the REC, said: “Businesses across the country are clear that they believe in their business and its plans – and they are continuing to hire. But concerns about the wider economic picture are slowing some decisions or reducing them in scale.

“While the overall picture of demand from employers remains very robust, the more that can be done by government to articulate a clear plan for growth, the more likely it is that firms will be willing to back their belief in their own business over concerns about the wider economic weather.

“An effective industrial strategy designed to boost competitiveness, investment and employment should be a key part of this, including major issues like childcare, transport, immigration and welfare-to-work support. All of these have a significant effect on labour supply and growth potential.”

The REC added that headwinds of inflation, interest rates and low growth are making employers cautious when forecasting demand for staff.

The JobsOutlook showed demand in the next three months for permanent workers unchanged at +18 and for temporary workers at +8.