London businesses ‘optimistic’ about hiring

Employers in London are among the most optimistic about hiring new staff going into 2012, a survey has found.

The capital’s companies recorded a rating of +5 per cent despite a recent wave of redundancies in the financial sector, according to Manpower’s Employment Outlook Survey, which is used as a key economic statistic by the government and the Bank of England.

The positive outlook on employment prospects in London and other regions in the east of the country was in contrast to the negative rating recorded in the West of England and Northern Ireland, while job prospects in Scotland remained flat. The report comes ahead of the release of official unemployment statistics on Wednesday, which are widely predicted to show another increase.

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Of the 2,100 companies surveyed across the UK, four out of five had no plans to recruit new staff in the next three months, suggesting hiring expectations have hit their lowest level in three years. Finance and business services are among the sectors scaling back hiring plans, although utilities companies continue to hunt for new employees.

The North East was the most upbeat region, recording a +10 per cent rating, while employers in the East Midlands (+7 per cent) and the East of England (+5 per cent) were also optimistic about hiring prospects in 2012. Businesses in the South East recorded a rating of +4 per cent, but Scotland’s employment outlook was flat.

However, companies in the West are less likely to take on new staff next year, the survey found. Employment outlook in the South West (-4 per cent) was negative for the first time in 10 years, while hiring prospects in the West Midlands fell three per cent quarter-on-quarter to hit -3 per cent.

Manpower managing director Mark Cahill said: “The 2012 jobs market sits on a knife-edge. In some ways this is a reflection of a weakening economy. We hear stories about companies hoarding cash and not investing, and we see a number of business sectors battening down the hatches. Employers have adopted a wait-and-see approach to hiring – they are cautious about the economy and the fear of a euro-wide contagion is weighing heavily on their minds.”

The survey’s author said the stagnation in the UK’s jobs market has been caused by the financial and business services category. The employment outlook for this sector is now flat, whereas it had shown strong hiring intentions in previous surveys. But water, electricity and gas firms expect to recruit staff in the new year, recording a rating of +13 per cent.