‘Red flag’ raised for jobs as employers expect economy to stumble

‘Issues like access to labour, Brexit negotiations and political uncertainty are creating nervousness’

JOB opportunities are diminishing, with employers’ plans to hire falling to their lowest level in a year as the economic outlook darkens.

More companies expect the economy to worsen over the next three months than get better, meaning they are far less likely to recruit new staff, according to data from the Recruitment and Employment Confederation (REC). Its monthly poll found that 31pc of employers think the business environment will worsen, compared with 28pc who think it will improve, giving a net balance of -3, down from a reading of +6 last month.

Despite the gloomy predictions, business is still looking to hire though, with a net balance of +16 saying they expect to add permanent staff over the next three months, though this is slightly down on the previous report.

Looking further out the situation was similar, with a +14 balance saying they are likely to recruit over the next four to 12 months, down 3 percentage points on the last survey. This lowering of expectations should sound alarm bells, said Kevin Green, chief executive of REC.

“The jobs market continues to do well despite growing uncertainty but this drop in employer confidence should raise a red flag,” he said. “Businesses are continuing to hire to meet demand, but issues like access to labour, Brexit negotiations and political uncertainty are creating nervousness.”

Building companies are increasingly feeling the pinch, with anecdotal evidence of the vote to leave the EU meaning that foreign staff in sector are choosing to go home. Mr Green added: “Construction companies are especially concerned as they rely heavily on EU workers to meet the growing demand for housing and to support the government’s infrastructure plans.”

The REC chief called on the Government to clarify what shape Brexit will take to allow employers to formulate hiring plans, saying the current confusion about how it will play out is preventing them from working out how to take on staff. After construction, the sector having the most trouble finding staff with the correct skills is health and social care, followed by engineering and technology, REC data showed.

The squeeze comes as government data last week showed on unemployment in the UK has fallen to a 42-year low with a jobless rate of 4.4pc.