Employers’ confidence in the UK economy in May stayed close to the record low figure recorded in April, a survey has shown, as the Brexit deadlock continues to weigh on sentiment.
Confidence among bosses in making hiring and investment decisions also stayed near the record low level seen last month, the latest jobs outlook report from the Recruitment and Employment Confederation (REC) showed today.
However, employers’ hiring intentions remained stronger in May than confidence levels would suggest, with more saying they were looking to hire permanent staff than a year earlier.
The mixed figures add to a picture of the UK economy being pulled in different directions. While depleted business confidence has seen investment and trade fall, employment rates are at record highs and wages are rising.
Some economists have argued that British firms are hiring more staff in an uncertain environment rather than investing in machinery because of the lower short-term costs and ability to reverse the decisions by laying people off.
The REC’s report is compiled by asking over 600 employers their views on the jobs market. In May, far more bosses said they were not confident in the economy than said they were, taking the percentage balance to minus 29, up from the record low minus 31 seen in April.
Yet the balance of those looking to hire permanent staff compared to those not looking rose one point to 18.
Nearly half of the employers surveyed by the REC said they were seeing shortages of candidates for permanent jobs in engineering and health and social care.
Neil Carberry, chief executive of the REC, called on the government to scrap the policy that bans non-UK immigrants receiving visas unless they have a job that earns over £30,000.
He said ending the policy would “be a big first step” towards “protecting key sectors including the NHS”.
Carberry also said: “More businesses remain negative about the future than positive. This will only change when they have a greater sense of being able to invest with confidence in the UK – and that comes with securing a sustainable and smooth outcome to the Brexit process.”