Companies’ hiring intentions are at a “sky high” level and stronger than in the pre-recession boom years, though concerns remain about the UK’s failure to grow productivity, according to a new report.
The latest business trends report by accountancy firm BDO – published today – gives an employment index reading of 113 for March.
While that is little changed from February’s reading of 113.1, it remains well above the 100 level that indicates growth above the long-term trend.
The report also suggests that UK businesses will continue to boost job creation in the coming months.
It notes: “The hiring intentions of UK firms are at ‘sky-high’ levels with figures stronger than the heady days of the mid-2000s boom.”
Meanwhile the BDO’s optimism index showed business confidence remained well above the 100 mark.
But the report also pointed to the static level of British workers’ output per hour with the trend “unique amongst advanced economies”.
Office for National Statistics figures earlier this month showed productivity failing to grow since 2007 – a trend unprecedented in the post-war period. It has been described by the International Monetary Fund as a potential risk to growth.
Martin Gill, head of BDO in Scotland, said: “While it is encouraging to see strong business confidence, the continuing poor labour productivity performance is a very significant concern. Although employment growth in recent years has been strong, much of this has been in part-time jobs. Productivity ultimately determines our prosperity so it is a crucial area that must be addressed. Policymakers of all persuasion must take on this productivity puzzle”.