Region’s hiring confidence slumps
On the day of the Chancellor’s first Spring Statement, employers in Yorkshire and the Humber are becoming increasingly cautious about hiring, a survey has revealed.
The ManpowerGroup Employment Outlook Survey is based on responses from 2,102 UK employers. It asks whether employers intend to hire additional workers or reduce the size of their workforce in the coming quarter.
Amanda White, head of specialist markets for Manpower, said: “The jobs market in Yorkshire and the Humber is tough, with employers struggling to attract and retain the most qualified employees. While we are seeing demand to replenish our candidate pool for temporary positions, with workers willing to move jobs frequently for incremental increases in pay or better working conditions, it is challenging to meet the demand for permanent, highly skilled roles.
“There are some exceptions to this rule, however, with employment demand in Leeds and Sheffield for roles in finance and construction bucking national trends. Additionally, Leeds is seeing job demand being created by new companies choosing it as a regional hub, particularly in the logistics sector. More broadly in Yorkshire, warehouse, driving and administration roles continue to be in demand from employers in the parcel delivery sector such as Hermes and Parcelforce.”
Nationally, employers have recorded their highest level of jobs optimism in over a year, with an Outlook of +6%. This unexpected lift comes amid sluggish macro-economic data and continuing uncertainty about how we will leave the EU, despite the Brexit clock ticking. But there are worrying signs that surface-level optimism is masking a more uncertain reality, the survey said.
James Hick, managing director for ManpowerGroup Enterprise comments: “This surprise jump in confidence could actually be a mirage. Take the best-performing sector, Hospitality, which is up seven points to +16%, a huge fourteen-point rise since this time last year. On the surface, this might look like a sector that is firing on all cylinders, but this is at odds with the almost daily diet of news about struggles in the sector, such as Jamie’s Italian and Byron Burger. Our view on the data is that it shows how desperate employers are to fill vacancies in an industry that is heavily dependent on immigration, with up to 24%[1] of all staff coming from the EU. Given that the sector employs around 3 million people, losing that proportion of the workforce would leave a shortfall of three-quarters of a million people. In recent weeks we’ve seen more reports that the number of EU workers arriving in the UK is falling – particularly those from eastern Europe – and employers are racing to make up the shortfall.”
Now that the Bank of England has warned that it plans to raise interest rates at an accelerated pace over the next two years, there is also a question mark over the impact this will have on the economy.
“We are seeing early signs of caution in the bellwether sectors of Manufacturing and Construction, which are often the first to show signs of economic strain. Manufacturing is down by three points to +4%, a sign that the Brexit currency boost to the sector might be coming to an end,” says Hick.
“The Construction sector has experienced a huge drop in hiring confidence this quarter, with a six-point fall to just +1%, down 12 points on this time last year. This chimes with recent PMI data showing a slowdown in all activity, even housebuilding, which saw its worst performance since July 2016. Despite political commitments around housing, the data raises questions around the future of policies such as Help to Buy. This uncertainty is causing developers to sit on their hands – a stance which may have been exacerbated by the recent house price falls in London.”
With a sluggish housing market and a flat Outlook in finance and business services from last quarter (+6%), London sits towards the bottom of the regional table with an Outlook of +2%. Meanwhile, the picture is a bit rosier in some other parts of the country. The East tops the regional charts at +10%, and although confidence in the East Midlands (+9%) and West Midlands (+9%) has fallen two points each from last quarter, they are still riding high in the regional table, and the Midlands remains a strong engine for national growth.
