“Time for the UK economy to get its groove back”

Analysis of the UK recruitment market in March, commissioned by the REC (Recruitment & Employment Confederation) from multi-national accounting experts KPMG, show that, although the employment market is still at something of a plateau, early signs of recovery are expected.

Neil Carberry, Chief Executive of the REC, believes that the recruitment market will start to pick up soon, but has called on political parties to make the recruitment sector a priority for the coming election. He said: “Economic growth has been sidelined for too long and must be at the heart of this year’s General Election campaign. Today’s data shows the economy in a holding pattern waiting for inflation and interest rates to ease, so that firms can get to investing.

“The data here should support a decision by the Bank of England’s Monetary Policy Committee to loosen its grip on growth in the near-term future. Some sectors – like the bellwether firms in construction – need a clear signal. In other areas, particularly engineering, demand remains high, emphasising the importance of a new approach to skills from governments across the UK, led by reform of the Apprenticeship Levy. The uptick in the need for blue collar staff may be a sign of consumer confidence starting to return – but it also emphasises again how labour shortages may constrain growth when it returns. A proper industrial strategy, with a meaningful and practical workforce element to it, is long overdue.”

Jon Holt, Chief Executive and Senior Partner of KPMG in the UK, said: “Persistent economic uncertainty has led to many business leaders delaying major investment decisions and relying on savings for growth during the first quarter of the year. But they are optimistic about the outlook improving.

“And while March’s survey data indicates ongoing weak demand in the labour market with a sharp rise in candidate availability, relatively low levels of UK unemployment together with falling inflation could pave the way for economic recovery.

“There are still headwinds, but it’s time for the UK economy to get its groove back – and UK businesses will be ready when the Bank of England makes its interest rate cuts. This may not lead to an instant rebound, but confidence to invest will increase, improving demand, and the economic outlook should start moving in the right direction.”