UK firms' hiring intentions 'sky high' but concerns persist over productivity

13/04/2015
Business Trends report maintains strong growth reading, suggesting job creation will continue to rise; signs too of building industry revival
Employers’ hiring intentions are at a “sky high” level and stronger than in the pre-recession boom, but concerns remain about the UK’s failure to grow productivity, according to a new report.

The latest Business Trends report by accountants and business advisers BDO gave an employment index reading of 113.0 for March. This was little changed from February’s reading of 113.1, remaining well above the 100 level that indicates growth above the long-term trend.
The reading suggested UK firms will continue to boost job creation in the coming months, according to the report. It said: “The hiring intentions of UK firms are at ‘sky-high’ levels with figures stronger than the heady days of the mid-2000s boom.” Meanwhile, BDO’s optimism index, showing 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.
The weakness has puzzled officials. It has been described by the International Monetary Fund as a major risk to growth.
BDO partner Peter Hemington said: “While it is encouraging to see strong business confidence, the UK’s 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. Policy makers of all persuasions must take on this productivity puzzle.”
Housebuilding drives construction revival
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There are also signs that Britain’s building industry is recovering. The number of new construction firms increased by almost 5,500 in one year, the first time the industry has seen a rise since the financial crisis.
Across the economy, almost 40,000 companies opened in 2013. That’s around a third more than in the previous year, according to a new report from accounting firm NoPalaver Group.
Director Graham Jenner said: “These figures suggest that the construction industry has finally reached a tipping point in its fortunes, with the number of new businesses being created on the up and the number closing their doors going down.
“Housebuilding has really picked up pace as the market has recovered. Demand for new homes is continuing to outstrip supply, moves to make the planning system more favourable are starting to have an impact, and initiatives such as help to buy have boosted homeowners’ buying power.
“At the same time, commercial property has also rebounded, as more businesses now decide the time is right to upgrade or expand their premises and developers press the green light on shelved projects or see more new opportunities coming onstream.”

Fonte:http://www.theguardian.com/business/2015/apr/13/uk-firms-hiring-intentions-sky-high-bdo-business-trends-report?CMP=EMCNEWEML6619I2

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