UK companies are the most pessimistic in Europe about hiring in the first quarter of next year, according to a major survey, with London’s jobs outlook hitting its lowest level on record as the hospitality industry is battered by coronavirus.
However, the overall jobs outlook for the UK for the first three months of next year improved by three points to minus six, according to the closely watched Manpower jobs survey. It was the second increase since the record low of minus 12 for the third quarter.
Positive vaccine announcements from various drug companies have sparked optimism that economies could begin to return to normal next year.
This has cheered business-owners, but they remain wary that they face a tough few months before any vaccine can have an impact.
In the UK, a tough system of tiered coronavirus restrictions has hit businesses. Companies are also worried about Brexit, with a great deal of uncertainty about the future regardless of whether there is a deal or not.
These worries contributed to the UK having the lowest net employment outlook score in Europe, according to Manpower Group’s quarterly survey. By comparison to the UK’s minus six, Germany’s score was eight and France’s was zero.
A negative score means more firms intend to reduce the size of their workforce than increase it. Manpower, a global recruitment company, asked 1,306 UK employers their hiring plans.
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London hiring outlook at record low
London registered its worst hiring outlook on record, Manpower said.
Despite usually being the powerhouse of the economy, it had the second-worst outlook in the UK behind Northern Ireland. This was in part due to its large retail and hospitality sector.
The employment outlook for retail and hospitality in the UK as a whole dropped to minus 13, its lowest ever figure.
“The headline numbers are steadily moving in the right direction,” said Manpower’s UK managing director Mark Cahill.
“However, despite this positive trajectory, the UK remains the least optimistic in Europe.” Cahill said the “continued uncertainty over Brexit and the effects of a second Covid-19 wave [are] still looming large”.
The UK’s budget watchdog last month predicted that unemployment would peak at 7.5 per cent next year, putting around 2.6m people out of work.
It rose to 4.8 per cent in the three months to September from below four per cent before the pandemic.
The Bank of England has made similar forecasts, predicting the worst downturn in 300 years. Bank chief economist Andy Haldane has said Covid-19 vaccines improve the outlook, although another BoE policymaker last week was less optimistic.
Nonetheless, the UK’s finance and business services sector’s hiring outlook improved to a score of two for the first quarter of 2021. The change highlights a divide in the UK economy between stay-at-home workers in unscathed sectors and face-to-face service providers.
By Harry Robertson
Source: City AM
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