Employers in all sectors of the economy are pessimistic about the outlook for jobs.

The percentage of firms forecasting a decrease in employment levels has grown at the fastest rate for eight years.

The drop in confidence mirrors the response given by employers during the last recession, raising fears that the UK could be heading for another sharp economic slowdown.

Tough times ahead

The survey lends support to the views of Sir Clive Thompson, president of the Confederation of British industry. He warned in his New Year message of impending UK job losses, with many firms facing a very tough 12 months.

Economists are predicting heavy job losses in 1999 as the UK economic growth falls, despite recent cuts in interest rates which have been designed to stave off a recession.

Some have gone as far as predicting that 500,000 employees will lose their jobs over the next 12 months.

Slump in confidence

Manpower's survey of more than 2,000 employers showed that the biggest fall in confidence at job prospects was in the automotive and general engineering industries. The private construction industry also looks like it is will continue to have a difficult time ahead.

Growth prospects are brighter in the South compared with the North according to the report.

Iain Herbertson, managing director of Manpower, said: "The survey shows the economy to be having the worst job prospects for five years. Whilst this does not bode well for the coming year, there are still indications of skill shortages in certain areas. Companies should not take this as an indication to curtail their training and development."