BOE Agents: Recruitment Difficulties Rise; Hiring Plans Modest

By David Robinson

     LONDON (MNI) - The Bank of England Agents' August Report, published

Wednesday, found evidence of more widespread recruitment difficulties while pay

settlements were still clustered below pre-financial crisis norms.

     The agents' August Business Summary stated that consumer spending growth

had eased, firms' hiring intentions were modest and that it was getting for

employers to fill vacancies but that pay growth had still not accelerated.

     "Recruitment difficulties had edged higher and broadened slightly. Pay

awards were clustered around 2%-3%," the report said.

     Before the global financial crisis pay awards of 4% plus were the norm, but

the UK has suffered a prolonged period of exceptionally weak pay growth.

     The BOE's regional agents contact businesses in their areas to get a feel

for how the economy is unfolding. Some contacts attributed weaker consumer

spending to growing caution and reported that customers were opting for cheaper

alternatives.

     Construction output growth was modest as were investment intentions and

only the manufacturing sector reported strengthening growth. 

     The picture of skill shortages, a struggling construction sector and softer

consumer demand is consistent with evidence from other surveys, including those

of the Recruitment and Employment Confederation and the purchasing managers

surveys.

     The agents scores showed recruitment difficulties in Q3 rose to 2.1 from

1.8 in Q2, the highest outturn since the 2.4 recorded in Q4 2015. Costs per

employee held steady at 2.0 for services, the level this measure has been at

since Q4 2015.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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