The impact of October’s Budget on employer confidence is ‘not as bad as feared’ according to the latest JobsOutlook from the Recruitment and Employment Confederation (REC).
Its survey of 634 UK employers found that employers’ perceptions of the UK’s economic performance were better in December (with a score of -12 compared to -39 in November, just after the government’s Budget announcements).
The REC argues that gloomy economic forecasts from a number of sources and business bodies could be “underplaying the potential” for 2025. “Demand for workers is down, it’s not gone,” the recruitment industry body said.
Its figures for December showed that medium-sized companies (between 50 and 249 employees) were markedly more positive about their hiring intentions for both permanent and temporary staff than smaller businesses.
Hiring confidence
Companies in London and the Midlands were significantly more positive about short-term hiring and temporary hiring, it found. Employers in the Midlands were the most positive about medium-term permanent hiring.
Private sector demand for temps in the medium term was much stronger in the private sector than the public sector, the REC found.
The REC said the effects of a summer slowdown in 2024 and the knock to confidence from the Budget had been “marginal” and “recoverable”. Over the past 18 months, the general trend has been towards more positivity, it added.
Employers’ confidence in making investment and hiring decisions fell by three points in the final quarter of the year (from -2 to -5) in contrast to the near-term peak +16 in the three months to June 2024.
This was heightened by concerns immediately following the Budget announcements of October, the REC said. In November, the barometer dropped to -17, but returned to positive territory (+2) in December.
Neil Carberry, REC chief executive, said: “There can be no doubt that the Budget created headwinds for companies all over the country. But these data show that the economy is bigger than government policy, with employers’ confidence holding steady as we head into 2025.
“The growth reset that the Chancellor has been talking about is vital to keeping up momentum now. In 2025, the government needs to be a source of tailwinds for firms as they speed for growth.
“A balanced view of today’s report shows there is opportunity out there for businesses and candidates alike, but more to do to grasp it. Making sure that the industrial strategy tackles long-term challenges like infrastructure, skills, and taxation with more of a can-do attitude will be vital.”
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