Recruitment slumped to a decade low in December and is expected to fall further this year.
Research showed hiring intentions among business leaders tumbled to the lowest level since August 2013 last month.
Unemployment is expected to grow and job vacancies fall over the next year, according to analysis by accountancy firm BDO. But bosses remain more optimistic about 2024 than last year.
Businesses have entered the year on a ‘brighter’ note after a surge in demand over Christmas, and an expectation of rate cuts. However, BDO predicted that the UK economy will remain stagnant due to higher borrowing costs and inflation.
BDO’s Employment Index, which tracks hiring intentions, fell for the six consecutive month in December to 99.12 points. But the index measuring output rose slightly by 0.9 points, marking the second month in a row of improvement. The increase was driven by the services sector.
Slump: Research showed hiring intentions among business leaders tumbled to the lowest level since August 2013 last month
Meanwhile the optimism index ticked up 0.1 point to 98.44. The increase was the first time since December 2021 that both optimism and output have risen in the same month.
Kaley Crossthwaite, at BDO, said: ‘It’s encouraging to see our services sector spearheading a small upturn in optimism and output. It is critical that businesses see renewed support from the government to enhance their productivity, increase recruitment and bolster skills.’
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