Employers became more positive in July about making hiring and investment decisions for the first time since February, although more companies laid off workers as coronavirus bit the UK economy.
Bosses’ confidence in bringing in new workers and spending to grow rose to a net level of four in July, according to the Recruitment & Employment Confederation (REC)’s latest jobs outlook survey.
A positive reading means that survey respondents on balance think the outlook has improved since the month before. The reading of four was up from minus nine in June.
However, much damage has already been done to the jobs market. One in six or 17 per cent of employers had made redundancies in the year to July, up from nine per cent in the year to June, the REC said.
Yet employers’ short-term hiring intentions also improved between June and July. REC’s gauge of expected short-term demand for permanent staff rose to 14 from six in early June.
Firms remain gloomy about UK economy
But medium-term demand stayed flat with a score of 14 on the scale. That suggests firms are uncertain about the future path of the UK economy.
The survey came as the UK gradually reopens from coronavirus lockdown. Non-essential retailers, pubs, restaurants and cafes have all been allowed to open again. Gyms and pools will be allowed from next week.
The government is slowly winding down its flagship job retention scheme which pays workers’ wages. Economists worry that this could cause a surge in unemployment in the autumn.
And today’s REC survey showed that companies remained firmly gloomy about the UK economy. The confidence gauge sat at minus 40, although it improved month to month.
Neil Carberry, chief executive of the REC, said: “Businesses are still very worried about the overall outlook for the economy.”
“While some are hiring, many are having to make tough decisions around laying people off.”