UK employer confidence in economic conditions has dropped for the third month in a row

Rebecca Smith
Regional variations in confidence were noticeable with a net balance of -15 in London
Regional variations in confidence were noticeable with a net balance of -15 in London (Source: Getty)

UK employer confidence in the economy has dropped for the third month on the trot as a rising number of firms believe economic conditions are worsening, according to a new report from the Recruitment and Employment Confederation (REC).

The REC's latest jobs outlook survey found that more firms thought economic conditions were worsening than improving, in July to September, with sentiment further deteriorating from last month by two percentage points across the quarter.

Firms have expressed concern over a lack of clarity regarding what Brexit plans will look like, and how they will fill vacancies in the future.

There was notable regional variation in confidence too, with a net balance of -15 in London, compared to +3 in the Midlands.

Read more: Employers remain "resilient" despite steep falls in confidence

Although jitters are clearly being felt surrounding economic conditions, confidence remained stable in making hiring and investment decisions. The survey of 600 employers found they were more likely to say they would be increasing rather than decreasing their permanent headcount over the next quarter, with those in the public sector most positive.

REC's chief executive Kevin Green said overall the results of the latest survey were "very worrying".

The net balance of employers planning to increase temporary agency worker headcount within the next three months has also dropped to -9 across all sectors.

Green said: "Although the demand for temporary agency workers is declining, the demand for permanent staff remains strong – which is a positive sign. The jobs market’s unprecedented growth is at a tipping point. Clarity around trade, residency and immigration could prevent a rapid decline in the UK’s successful labour market. We’re looking for political leadership."

Green also said the anticipated shortage of candidates in the health and social care sector "could have severe consequences".

Non-UK nationals make up around 10 per cent of the workforce in this sector. There have already been predictions that the NHS in England might suffer its worst winter in recent history as skills shortage start to bite and workers from the EU go home while fewer apply for roles.

Read more: Employer confidence in the UK economy has dropped sharply

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