Post-Brexit, could the UK jobs market be in for a rough ride?
Two-and-a-half months on and it appears that the world has gotten over the shock of Brexit, yet back on its home turf, the U.K.'s decision to quit the European Union, still lingers.
As Britons adapt to a new government and digest new economic data about what a post-Brexit U.K. could look like, employment consultancy ManpowerGroup warns that the job market should be watched closely, as the U.K. may currently be in "the calm before the storm."
In the latest Manpower Employment Outlook Survey, out of the nine industry sectors surveyed, eight are expected to grow in staffing levels during 2016's final quarter, highlighting that on the surface, the referendum outcome has "done little to dampen employers' immediate hiring plans."
For 2016's final quarter, the strongest hiring plans come from employers in the agriculture and hotels & retail sectors, along with regions such as London. The boost in sentiment seen in these areas helped maintain the survey's net employment outlook at +5 percent.
Yet in its survey which looks at U.K. employer responses, despite job prospects having remained relatively stable, Manpower suggests that "cracks in the ice" are starting to appear within the country's labor market, after six out of nine sectors reported a drop in jobs optimism.
Portrayed as "bellwether sectors": construction, financial & business services, and utilities showed the biggest declines in confidence, having all reported a four percentage point dip in employer optimism when comparing Britain's final quarter to its third quarter for 2016. Looking at regions, employers in Yorkshire & the Humber and Northern Ireland expect staffing levels to fall.
On top of that, the Manpower outlook survey revealed that sentiment around hiring in the public sector had tumbled to its weakest level in over four years. A sector that according to Manpower, accounts for close to one in 10 U.K. jobs.
During the quarterly survey, the organization asked 2,102 U.K. employers whether they intended to increase or reduce the number of employees they have in their workplace in the upcoming quarter. This is the first of the quarterly outlook surveys to be conducted since the Brexit vote, on June 23, 2016.
And it's not just employers feeling less optimistic. In a survey published late July, the Chartered Institute of Personnel and Development (CIPD) uncovered that 44 percent of British employees felt pessimistic following Brexit, while 22 percent said they felt less secure in their job due to the vote's outcome.
Following the report's release, ManpowerGroup UK's Managing Director, Mark Cahill, said the U.K. was going into a "new phase of prolonged economic uncertainty", with the outlook for freedom of movement throughout the EU being of significant concern.
"The future of freedom of movement across the EU is of particular concern. As UK businesses are reliant on European talent to help fill the skills gap, we urge the government to prioritize maintaining the free movement of people across the EU during its negotiations," Cahill said in a statement.
"This would make sure the UK remains competitive, while sending a powerful message to skilled jobseekers — Britain remains open for business."