UK hiring intent declines since vote to leave EU

British employers’ willingness to hire and invest has fallen to its lowest since last year’s vote to leave the EU, a survey by the country’s recruitment industry showed yesterday.

The UK’s Recruitment and Employment Confederation said 29% of firms surveyed reported higher confidence in hiring and investment, but 20% were less confident than before. The positive margin was the narrowest since the REC started the survey in its current form in June 2016.

Employers’ confidence about the economy, in general, was the lowest since November.

“This drop in employer confidence should raise a red flag,” REC chief executive Kevin Green said.

“Businesses are continuing to hire to meet demand, but issues like access to labour, Brexit negotiations and political uncertainty are creating nervousness,” he added.

It is unclear how much Britain’s government will curb immigration by EU workers after the country leaves the bloc in March 2019.

Official statistics last week showed that year-on-year growth in the number of non-British EU-born workers fell to a seven-year low in the three months to June.

The REC said staff shortages were most acute in the construction and health and social care sectors, both of which rely heavily on foreign staff.

Overall, 40% of employers said they had “absolutely no” spare capacity, up from 35% a year earlier.

Meanwhile, eurozone business growth maintained a solid clip in August, driven by the best manufacturing performance in six and a half years despite a strong euro, easily offsetting a mild slowdown in services growth.

The momentum was underpinned by strong manufacturing growth in both of the eurozone’s biggest economies, Germany and France, and suggested 0.5% economic growth for the eurozone in the last three months.

The data is likely to support expectations that the ECB will proceed later this year with making plans to scale back its multi-billion euro monthly asset purchases.