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Employer confidence falls as hiring intentions rise in Q2 2026 – REC

Employer confidence in the economy dropped by four percentage points to net -47% between April and June 2026 compared to February to April 2026. 

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Employer confidence falls as hiring intentions rise in Q2 2026 – REC
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Employer confidence in the UK economy fell in the second quarter of 2026, but hiring intentions increased, according to the latest Recruitment and Employment Confederation (REC) JobsOutlook survey. 

The research found employer confidence in the economy dropped by 4% to net -47% between April and June 2026 compared to February to April 2026. 

Sentiment was lowest in April at -56% but picked up to -43% in May.

According to the latest data, confidence to hire and invest also fell by 2% to net: -14% over the same period, with April at its lowest point of -24% before improving to -9% in May.

Short-term permanent hiring intentions stood at net 9%, up 5% on the previous quarter. 

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Medium-term permanent hiring was up four percentage points to net +10%. 

Medium-sized businesses with 50 to 249 staff were the most positive on permanent roles. 

Temporary staffing for the short term was net 3%, up 2% from the previous quarter, ending a run of four quarters in decline. 

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Medium-term temporary hiring held steady at net 5%, with medium-sized businesses again most positive.

Maxine Bligh, chief membership & innovation officer at REC, said: “Employers continue to tell us they want to hire, and recruitment intentions are gradually improving. 

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“We also see signs in the data that employers are considering converting their recent reliance on temporary workers into permanent hires. But many businesses remain cautious. 

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“The gains are clearly there for the taking if the new PM follows through on his early signals that he wants to reduce business burdens as well as the costs to hiring.”

Bligh added: “The focus on tax relief is welcome but overall, it is small fry to firms when you consider the extent of costs already absorbed and coming down the line as a result of the Employment Rights Act.

“The government has loaded too much onto employers at once, making it harder for the job market to get off the ground. 

“Ministers must rethink elements of their employment rights reforms, especially the unworkable guaranteed-hours proposals for agency workers.”

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She said: “If the government wants to unlock stronger job creation, it must keep the labour market flexible and support businesses’ capacity to hire and grow.”

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