Britain’s employers have refused to panic following the referendum vote, but new jobs are likely to become increasingly scarce as concerns over Brexit talks undermine business confidence.
Recruitment agency Manpower said that, on the surface, the EU referendum had done little to dampen firms’ immediate recruitment plans. Official figures show employment is steady and the number of people claiming jobseeker’s allowance is falling.
However, Manpower said the UK jobs market was “skating on thin ice”, with cracks starting to appear in many areas of the economy.
A survey of more than 2,100 employers showed that companies in business and financial services, construction and utilities were less optimistic than before the referendum, while prospects also fell in manufacturing.
Employers in several sectors said they were concerned that key staff would be affected by a block on EU workers staying in the UK.
The survey chimes with a raft of similar reports showing that employers are nervous about Brexit negotiations that could see the UK leave the single market and impose strict limits on EU workers coming to Britain.
The ratings agency Standard & Poor’s said signs of a post-referendum recovery should be treated with caution because a rebound in August only made up for ground lost in July.
“While the news is encouraging, we believe it has no bearing on the cloudy longer-term outlook for the UK economy,” said Sophie Tahiri, an economist at S&P Global Ratings.
An expansion over the next few months could be viewed as the economy returning to “business as usual”, but this may prove to be premature or even a mirage, she said.
“The uncertainty surrounding the UK’s future outside of the EU – and the associated economic risks, which we think are pronounced and predominantly skewed to the downside – will gradually take its toll, particularly on investment, as businesses start dealing with the new Brexit reality,” Tahiri said.
Manpower said the government’s austerity cuts were also taking their toll, cutting the number of jobs in the public sector, especially in local government.
“Conducted in the weeks following the referendum, the survey shows that while UK job prospects have held firm, cracks in the ice are appearing, with six out of nine sectors surveyed reporting a fall in jobs optimism,” the report said.
Mark Cahill, Manpower’s UK managing director, said: “After the initial shock of Brexit, we’re entering a new phase of prolonged economic uncertainty. The future of freedom of movement across the EU is of particular concern.”
Cahill said employers were reliant on European talent to help fill skills shortages, especially in IT and the City.
Manpower said financial centres in the EU were circling financial institutions in the City to steal work and skilled staff. It said there had been an 800% increase in applications for finance positions in Dublin since the EU referendum.
Many employers in the health service and care sector also rely on foreign workers from the EU and were concerned about filling skills gaps.
The study found that job prospects in the public sector had fallen to the weakest level in four years, dragged down by forecasts of further rounds of redundancies in local government.
