According to the latest JobsOutlook report from the Recruitment and Employment Confederation, the impact of the October Budget on employer confidence was ‘not as bad’ as feared.
The survey found that the perception of UK economic performance by employers was better in December than in November (with a score -12 as opposed to -39 just after the Budget announcements by the government).
The REC argues gloomy forecasts of the economy from a variety of sources, including business organizations, could “underplay the potential” in 2025. The recruitment industry said that although the demand for workers has decreased, it is not completely gone.
The figures from December show that the medium-sized businesses (between 50-249 employees) are more optimistic about hiring permanent and temporary staff.
The study found that companies in London and the Midlands are significantly more optimistic about temporary and short-term hires. The Midlands was the region with the most positive attitudes towards medium-term permanent employment.
The REC concluded that the demand for temp workers in the private sector was higher in the medium-term than in the public sector.
The REC stated that the effects of a slowdown during the summer in 2024, and the blow to confidence caused by the Budget were “marginal”, and “recoverable”. The REC said that the trend in the last 18 months has been more positive.
The confidence of employers in hiring and investing fell three points (from -2, to -5), compared to the peak near-term +16 for the three-month period ending June 2024.
The REC stated that this was exacerbated by the concerns following the Budget announcements in October. The barometer fell to -17 in November but rebounded to +2 in December.
Neil Carberry said, “There is no doubt that Budget has created headwinds in companies across the country.” These data, however, show that the economy is larger than government policy. The employers’ confidence has remained steady heading into 2025.
The Growth Reset, which the Chancellor spoke of, is crucial to maintaining momentum. The government must provide tailwinds to firms in 2025 as they strive for growth.
“A balanced look at today’s report shows that there are opportunities for both businesses and candidates, but there is more work to be done to seize them. It is vital that the industrial policy tackles long-term issues like infrastructure, taxation, and skills with a more can-do approach.
