Economy Contraction Worse Than Previously Thought
Written by Geoff Newman on 04/07/2012
Recruiters can expect to see a rising number of temporary vacancies after it was revealed that the economic contraction at the end of last year was worse than expected. New data from the Office for National Statistics (ONS) showed that the economy shrank by 0.4% instead of the previously predicted 0.3%, placing doubt in many employers’ minds.
Though the economic figures may be in relation to a period many months ago, employers and businesses will still sit up and take notice that economic conditions are worse than previously feared. It could well shake up employer confidence, leading chief executives to cut down on the number of permanent staffing roles that they have available. Instead, recruitment agencies could see a rising number of temporary and contact roles available as executives look to avoid the long-term contractual obligations that come hand in hand with hiring permanent members of staff.
Talking of the latest figures, David Tinsley from banking group BNP Paribas said that the data should not be too concerning. “I don't think it is all doom and gloom. The underlying position in final demand is a little bit stronger than the GDP figures would suggest. The survey figures suggest there is still some forward momentum. But overall growth will look very close to zero this year,” he said.
Despite Mr Tinsley’s views, many employers may want to take a conservative approach to hiring. This will almost certainly suit workers looking for short-term placements, offering a rise in temporary work until economy conditions stabilise.