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UK employers less optimistic about hiring

Latest CIPD/KPMG index points to growing pessimism among businesses

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Hiring optimism dropped among Britain’s employers in recent months as an array of economic headwinds took their toll, according to a new survey.

Research from the Chartered Institute of Personnel and Development (CIPD) and KPMG showed that although more companies expect to add jobs than cut them over the next three months, the positive balance dropped from +32 to +23 during the past quarter.

The CIPD and KPMG study casts further doubt on the prospect of job cuts in the public sector being offset by gains in the private sector, as the coalition government has consistently stated.

Sentiment with regards to hiring among public sector employers stands at -52 for the coming quarter, according to the index.

Particularly worrying data includes a sharp fall in hiring confidence among manufacturers, while the balance of employment prospects came in negative among private sector operators in the north of England.

Gerwyn Davies, public policy adviser at the CIPD, said: “Increasing uncertainty about growth prospects in both the UK and global economies is now affecting hiring intentions.

“Together with the public sector redundancies, which will affect one in 20 front-line workers according to our survey, the recent story of an employment revival may become one of an employment relapse.”

KPMG’s chief economist Andrew Smith listed what he called “economic storm clouds” affecting sentiment in the UK, with real incomes being squeezed, the euro zone’s debt crisis apparently worsening and “barely stall-speed” growth in the US all offering cause for trepidation.

“Of particular concern is that hopes of a general rebalancing in the economy, away from consumption towards exports and investment, are being dealt a blow by sinking manufacturing confidence,” Smith said.

The latest figures released by Markit and the Chartered Institute of Personnel and Supply showed that activity among the UK’s manufacturing companies contracted last month for the first time in two years.


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