UK employers plan to keep hiring despite Brexit and slow growth

Manufacturers are most optimistic about recruiting but public sector looking to cut jobs, ManpowerGroup poll finds

Employers in Britain are planning to take on new workers over coming months despite looming Brexit negotiations and slower economic growth, according to a survey.

A poll of 2,109 employers by recruitment agency ManpowerGroup found that a net balance of 5% were planning to increase staff levels rather than cut them over the July-to-September quarter. That was unchanged from the previous poll three months ago but down slightly from a +7% reading at the end of 2016 when the UK economy was still growing strongly.

Since the start of this year, the economy has lost steam as consumers have cut back on spending amid rising cost pressures. The pound’s sharp fall since the Brexit vote has made imports more expensive and official figures due on Tuesday are expected to show that inflation held at its highest level for more than three years last month.

ManpowerGroup said employers were still intending to increase their workforces on average in the coming quarter, with employers most optimistic in Yorkshire and Humberside, the south-east and West Midlands.

“Employers have faced a triple whammy of uncertainty over the last few months – a snap election, the triggering of article 50, and weak economic data for the first half of 2017. You might have expected hiring confidence to have taken a real hit, but employers have been standing firm,” said James Hick, the managing director of ManpowerGroup Solutions.

The recruitment firm highlighted stark contrasts between sectors. Manufacturers were most optimistic about hiring but the outlook for the public sector was far gloomier, with a majority of employers looking to cut jobs.

The poll, conducted during campaigning for the snap general election, found a net balance of 7% of manufacturers expected to increase their workforce over the coming quarter. ManpowerGroup put some of the strength down to investment, citing plans by the maker of Dulux paint, AkzoNobel, to open a new plant in Ashington, Northumberland.

Hick also cited support for manufacturers which export thanks to the boost to competitiveness from a weaker pound. “Manufacturing is the standout sector this quarter, driven by investment from outside the UK; following the shock election result, currency is cheap and sterling’s weakness is manufacturing’s strength,” he said.

The hiring balance for the public sector fell to a six-year low of -6%, suggesting employers were planning to shrink their workforces despite signs the next government would ease up on austerity. “Both main parties pledged a rise in NHS spending. However, with the public sector outlook in the doldrums, employers don’t seem to think that hiring is going up any time soon,” said Hick.

ManpowerGroup said the inconclusive election result could turn out to be positive for those employers, including in the NHS, which had been worrying about access to workers after Brexit.

“The election result throws into question the Conservative commitment to slash immigration to the tens of thousands and double the levy on non-EU workers to £2,000,” said Hick.

Contributor

Katie Allen

The GuardianTramp

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