Businesses are increasingly in the mood to hire, according to the latest report on business trends from accountants BDO LLP and reprted by ENforbusiness.
The willingness to take on new staff is at a 30-month peak as hiring expectations catch up with improving business confidence, according to the organisation.
The BDO Employment Index, which measures UK businesses’ hiring intentions over the next two quarters, reached 99.4 in December, up from 98.3 in November. The index has now been at or above the crucial 95 level that indicates employment growth for 12 months and is now almost at the 100 mark, which points to employment increasing at its long-term rate.
In line with this, business confidence showed similar improvement. BDO’s Optimism Index, which predicts business performance two quarters ahead, reached 103.4 in December, up from 103.1 in November. This is the index’s highest reading in seven and a half years, marginally below its highest score in Business Trends’ 22-year history, and comfortably above the 100 mark that indicates trend growth (approximately 2.4%) of the UK economy.
Peter Hemington, a partner with BDO LLP, said:
“We’re encouraged to see that UK businesses are growing in confidence and have sharply increased their hiring intentions over the past month, which should help to keep the unemployment rate on a downward trajectory.
“The issue of unemployment is particularly important given the Bank of England Governor Mark Carney’s decision not to allow an interest rate rise until the unemployment rate is at or below 7%.
“The flip side of all this is that labour productivity is still far below its pre-crisis peak. As a result, the issue of underemployment remains, with some 1.5 million workers seeking full-time jobs being forced to work part-time over August-October 2013.”
Source: ENforbusiness
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