Employer confidence stable as Brexit negotiations start but still down over the year

Jasper Jolly
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Daily Life In Multicultural Birmingham
Employers around the country are waiting for the next step in Brexit negotiations (Source: Getty)

Employer confidence in the economy has stabilised as Brexit negotiations begin, but optimism remains stubbornly below levels seen a year ago.

A third of British employers thought the country’s economic conditions are getting better in the three months to May, according to a survey by the Recruitment and Employment Confederation (REC).

However, a similar level, 27 per cent, think the economy is declining, giving a balance of positive sentiment of only six per cent, well below the 26 per cent positive balance in June 2016.

Read more: IoD: Business confidence dives as political uncertainty rises

The mixed view from businesses reflects the conflicting signals from the UK economy.

Growth slowed considerably in the first quarter of the year, with higher inflation threatening to cut consumption. However, unemployment remains at its lowest since 1975 and the employment rate is the highest on record.

Almost two-thirds of businesses said they had increased salaries in the three months to May, while 55 per cent had increased staffing levels.

The balance of firms saying they expect to grow more confident in their hiring and investment decisions has remained steady at levels reached in January. A third say confidence will improve and 16 per cent think it will get worse.

Read more: What a year: London small business confidence has jumped

Some 83 per cent of firms across the UK report they have little or no spare capacity within their organisation, with 44 per cent of firms within London saying they would definitely have to take on more employees to do more work.

Kevin Green, REC chief executive, said: “One year on from the EU referendum, it is encouraging to see the labour market continue to perform well despite the political and economic turbulence.

“Although confidence in the economy has fallen, businesses have held their nerve and delivered record levels of employment in the UK and this should be applauded.”

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