Brexit worries fade as British firms plan to take on more worker

( via – – Tue, 29 Nov, 2016) London, Uk – –

Union Jack

Businesses plan to hire more workers into the new year, as service sector employers’ worries in the summer after the EU referendum turn to cautious optimism.

Their longer-term plans are more uncertain, however, leading to investment cutbacks, a survey of service sector members of the Confederation of British Industry (CBI) has found, with spending on vehicles and machinery reduced.

Consumer companies are the most positive about their financial prospects, with households remaining upbeat since the Brexit vote and spending more in the shops.

The CBI found the proportion of consumer companies reporting above-normal business volumes outweighed those reporting low business levels by a margin of 22 percentage points. Firms are also increasingly optimistic about the coming months.

Companies serving other businesses, particularly in professional services markets, are less positive, however. A net balance of 10pc said business levels are below normal, and a balance of 17pc are pessimistic on the overall business environment. Companies in both sectors expect to keep on hiring workers, however, at an accelerating pace.

That bodes well for Britain’s wider economy, where unemployment is currently at an 11-year low and has fallen since the EU referendum in June, defying fears of an immediate slump.

The CBI’s chief economist, Rain Newton-Smith, said: “Employment growth remains strong and service sector firms are looking to hire in the months ahead. Many firms still plan to invest in IT, but uncertainty over future demand could act as a restraint.

“The Autumn Statement will have offered some comfort to businesses as the Government looks to build on the UK’s economic strengths, with an industrial strategy that helps deliver growth across the country.”

By Tim Wallace