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Last Updated: Tuesday, 15 March, 2005, 01:15 GMT
UK firms 'to take on more staff'
Worker on building site
Prospects in the building industry are looking up
UK companies are optimistic about creating more jobs over the coming three months to June, research from recruitment firm Manpower suggests.

But a skills shortage means that it is currently a candidates' market - while higher wages to attract the best staff could spark wage inflation worries.

The labour market is "positive and stable", with 76% of employers planning to maintain staffing levels.

Of 2,100 firms quizzed, the sector with the best prospects was construction.

Only one of the nine employment sectors, utilities, was expecting to cut jobs between April and June.

'Positive' news

"The results from the construction and transport and communications sectors are notably positive," Manpower managing director Mark Cahill said.

The strong labour market indicates that employees are happy to move jobs, while employers are happy to replace them.
Mark Cahill, Manpower

"Confidence amongst employers in the finance and business services sector is still positive, though appears to be easing with companies reporting their least optimistic second quarter results for five years," he added.

Manpower measures how many firms intend to take on staff and how many plan to cut back - by subtracting the latter from the former it arrives at a net employment outlook. A negative percentage means job cuts.

At present the UK figure stands at a seasonally-adjusted plus 12%.

Mr Cahill said that the group's research showed a picture of stability, adding: "The strong labour market indicates that employees are happy to move jobs, while employers are happy to replace them.

"However, there is a prospect of growing wage inflation as the labour market tightens."

Scottish drive

Across the 12 regions and nations of the UK employers in Scotland are the most bullish with a plus 29% looking to expand their workforce - a rise of 5% from the same time last year.

Construction - +22%
Transport & communication - +18%
Mining - +17%
Community & social - +16%
Finance & business - +14%
Hotels & retail - +12%
Manufacturing - +8%
Agriculture - +2%
Utilities - minus 3%
*Manpower net employment outlook study
Conversely, companies in the south-west of England, east Anglia and London are the least optimistic, with readings below the national average.

However, Mr Cahill pointed out that the low readings do not mean job losses, they simply mean that employment levels are likely to remain unchanged.

"London is particularly stable with 89% of employers predicting no change to their workforce," he said.

The study also examined the outlook for Europe and the rest of the world, with China and Taiwan joining the survey for the first time.

German slide

Of the 11 European countries surveyed employers in all but Germany and Italy expect to be taking on more staff.

The employment outlook for Germany was the worst, at minus 6%, while Italy's was minus 1%.

Germany's economy has been faltering in recent years with unemployment levels rising to a 70-year high of 5.2 million, while economic growth actually went into reverse at the end of 2004.

However prospects are booming in the Irish Republic (+15%) and Norway (+12%).

Across the globe, 19 of the 21 countries studied expect more jobs to be created - with Japan and Taiwan showing the most buoyant employment outlooks of plus 35%.

China - the world's fastest growing economy - was close behind with a positive net employment outlook of 30%, the same level as New Zealand.

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