"Our data on medium-term recruitment intentions suggest that stronger economic growth in the next few years will not be accompanied by big rises in employment"
- Gerwyn Davies, Labour Market Adviser at CIPD
Britain now is one of the fastest growing economies in the world and recent data from all key sectors- manufacturing, construction and services, are suggesting the U.K. would build up steam in the coming months, hence, the pace of growth is likely to accelerate. Nevertheless, despite solid growth and a pickup in business confidence, companies are still reluctant to ramp up hiring quickly, a new survey from the Chartered Institute of Personnel and Development showed Monday. In the short-term the outlook for the nation's employment has moved higher significantly, as confidence among near-term employers soared to the highest since 2005. It suggests the main driver behind the short-term increase in employment would be led by hiring in the private sector, manufacturing, retail as well as production sectors. Meanwhile, just 17% of respondents are planning to increase staff by more than 2% unless the economy returns to expansion of 2% or even more.
While the short-term outlook is positive, in the medium-term companies may be more cautious regarding hiring intentions. Figures also showed that 42% of businesses would leave staff levels unchanged, while 23% would not step up on hiring, as they expect productivity to improve when the whole economy picks up. According to survey results, companies are highly dependent on economic growth, and it seems the current pace is not strong enough to translate into increased intentions to hire more staff.
© Dukascopy Bank SA