Scottish businesses’ hiring intentions have fallen sharply to levels last seen in 2014, according to the latest Business Trends Report by accountants and business advisers BDO LLP.
The report released this week reveals that the Employment Index, which tracks firms’ intentions to hire in the coming six months, has dropped from 104.8 to 102.2 (the equivalent year on year figure in April last year was 112.0).
While still above the long term trend, this is the biggest monthly drop in the growth of employment since the aftermath of the financial crisis.
Firms in Scotland appear to be increasingly shunning new hires as the National Living Wage makes employment more expensive. Some firms may also be holding off until uncertainty about future membership of the EU is resolved.
BDO’s Output Index – which reflects companies’ experience of orders for the coming three months – is at 100.6 down from 101.3 in March and down from 104.3 in April last year. BDO’s Optimism Index has risen marginally in April to 99.5 from 99.4 in March but it is down considerably from 104.7 in April 2015.