Partner Article

Hiring intentions reach a two year low

The number of businesses planning to employ staff has fallen to a two-year low last month, according to accountancy and business advisors, BDO. Hiring intentions dropped to 90.7 point in September in BDO’s Employment Index, while business confidence has taken a turn for the better. Optimism amongst UK companies has been in a “zigzag” trend since 2008, and has risen to 92.5 points, although BDO said this is still low.

Conditions remain tough for businesses, despite a rise in confidence, and BDO said this increase reflects the uncertainty that many UK businesses are feeling. The Employment Index decrease also indicates the challenging climate that firms face, as unemployment rose to 8.1%. The labour market does not look set to improve before 2013, however BDO said fall in hiring intentions is simply a “mild downturn”.

Peter Hemington, Partner, BDO LLP, commented: “With tough business conditions becoming further ingrained, there is of course no quick fix to the UK economy’s ails. However, despite the current slight downturn, we welcome the continued surprising strength of the UK labour market. We would encourage the Government to take advantage of next week’s Conservative Party Conference to champion an innovative and flexible approach to strengthening the UK labour market, a key driver for economic recovery.”

Output for UK companies was up 0.4 points in September to 91.2, which indicated the economy will plateau over the coming months, rather than contracting, while BDO’s Optimism index rose 3.4 points.

This was posted in Bdaily's Members' News section by Miranda Dobson .