July jobs outlook – employers feeling more positive about their own businesses

The latest Recruitment & Employment Confederation (REC) JobsOutlook shows employers feeling more positive about their business prospects – and slightly better about the wider economy.

In April-June 2023, employers’ confidence in making hiring and investment decisions for their own business continued to rally. A net balance of +7 showed more businesses growing in belief than those who were doubtful. This measure moved into positive in the Spring for the first time since early 2022. Businesses’ views on the wider economy also got better but remained negative overall at a balance of -41 (April-June 2023). 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.

The headwinds of inflation, interest rates and low growth are certainly making employers cautious when forecasting demand for staff. JobsOutlook shows demand in the next three months for permanent workers unchanged at +18 and for temporary workers at +8. Medium-term (four to 12 months) forecast demand for permanent workers dropped to +16 from +20 during February-April 2023 and for temporary workers it is in negative territory at -8.6. The contrast of growing confidence in their own business but caution on hiring decision-making reflects the unpredictability of 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.”

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