UK employers' confidence falls to lowest level since Brexit vote

UK employers' confidence in making hiring and investment decisions fell to its lowest level in July since last year's Brexit vote, a fresh survey has suggested.

The Recruitment and Employment Confederation's (REC) JobsOutlook survey revealed that a net balance of +10 were confident about increasing hiring and investment over the next three months, the lowest score recorded since June 2016.

The poll also suggested that employers are growing increasingly concerned over the state of the UK economy, with confidence in the general economy sliding to -3 from +6 in June.

Some 31% of the 601 firms surveyed now expect the economy to worsen while only 28% expect it to improve.

"The jobs market continues to do well despite growing uncertainty," REC chief executive Kevin Green said. "However, this drop in employer confidence should raise a red flag.

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

Some 40% of employers said they had no spare capacity and would need to recruit to meet additional demand, although several expressed concerns about a lack of appropriate candidates for vacancies, especially in construction.

The UK unemployment rate is at its lowest level since records began in 1975, making it more time consuming for businesses to recruit staff as there are fewer qualified people available for those jobs.

The fall in employer confidence in the UK has coincided with declines in consumer confidence, with GfK's consumer confidence index falling to its lowest level since the Brexit vote in June.

"Employers in the construction sector 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," Green added.

"The added factor of dropping consumer confidence is putting some businesses on edge. If people reduce their spending, businesses will be impacted."

Green called on the government to provide greater clarity to businesses over Brexit negotiations and whether firms can continue to recruit European Union nationals.