Falling manufacturing confidence undermines job prospects

The survey of over 1,000 employers from the Chartered Institute of Personnel and Development (CIPD) and KPMG shows that the employment recovery is set to slow sharply with a more sombre outlook now being driven by a fall in confidence particularly among manufacturing sector employers. The net employment index, which measures the difference between the proportion of employers that intend to increase total staffing levels and those that intend to decrease total staffing levels in the third quarter of 2011, has fallen to -1 from +3 in the past three months. Long-term prospects are even worse, with the twelve-month employment index falling to -6 from +2 last quarter Gerwyn Davies (pictured), public policy adviser at the CIPD, said uncertainty about growth was affecting hiring intentions; particularly in those industries such as manufacturing that stand to lose most in the event of a global slowdown. Andrew Smith, chief economist at KPMG, said: "Of particular concern is that hopes of a general rebalancing in the economy, away from consumption towards exports and investment, are being dealt a blow by sinking manufacturing confidence – undermining hopes that cuts in public sector employment will be offset by the private sector."