Hiring intentions for companies in the UK remain positive, according to a new report.
BDO's latest Business Trends Report gave the firm an employment index reading of 113.0 for March, a similar figure to that posted in February. It was well above the 100 level which indicates growth above the long-term trend. BDO found that UK employers plan to keep hiring more staff but they do harbour concerns about Britain's strategy to raise productivity.
Companies are now expecting to carry on this trend of employment as more opportunities open up in various sectors. BDO's optimism index, which charts business confidence, echoed these sentiments and remained well above the 100 mark. However, there is concern about the stagnation of worker productivity which remained static in terms of output per hour.
Peter Hemington, BDO partner, said: "While it is encouraging to see strong business confidence, the UK’s continuing poor labour productivity performance is a very significant concern.
"Although employment growth in recent years has been strong, much of this has been in part-time jobs. Productivity ultimately determines our prosperity, so it is a crucial area that must be addressed. Policy makers of all persuasions must take on this productivity puzzle."
Improving unemployment rates
The UK's unemployment levels have been steadily improving in recent months. A report by the Office for National Statistics (ONS), published in March, showed that unemployment had fallen by 102,000 to 1.86 million in the three months to January. This put the rate at 5.7 per cent and meant that the number of people in work was at an all-time high.
There was also a drop in the amount of people claiming Jobseeker's Allowance falling to 791,200, representing its lowest level since 2008. It highlighted the UK continuing its path to recovery following the financial crash and subsequent recession that occurred seven years ago.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.