Firms bullish on jobs in 1998

Jobs prospects for the new year are the most buoyant for almost a decade, while a majority of business executives believe 1998 will herald a period of sustained economic growth, according to two snapshot surveys today that appear to challenge the consensus view the economy is set for a slowdown in growth.

Employers believe the first months of the new year will see the highest net recruitment since 1989, with the gains being enjoyed by most regions and sectors of industry.

Hi-tech industries, including electronics and telecommunications, are the most optimistic about recruitment, with building and engineering firms also expecting to take on extra staff.

The survey of 2,221 employers by employment group Manpower showed that more than one in five of those polled predicted an increase in jobs from January to March, with 12 per cent expecting a cutback. This leaves a balance of 10 per cent, a rise of 4 per cent compared with a year ago and the highest first-quarter balance since 1989.

Lilian Bennett, chairman of Manpower, said: "Almost without exception our respondents take a positive view of the immediate future, while watching the medium and long-term carefully. They are, however, concerned about potential skill shortages and are reviewing their training plans."

A separate survey showed business leaders were optimistic about growth in the new year but highlighted rising inflation as the main threat to economic prosperity.

A poll of 267 members of the Institute of Management (IoM) found 60 per cent believed 1998 would usher in a period of sustained economic growth, although four out of 10 expected an economic down turn with 17 per cent forecasting a recession.

Three-quarters of managers (76 per cent) thought inflation would rise next year while 94 per cent said they expected interest rates to rise again.

Most analysts expect a soft landing with growth slowing to a sustainable pace and inflation close to its target. Earlier this month the Organisation for Economic Co-operation and Development downgraded its forecast for UK economic growth rate to 2.2 from 2.7 per cent in the light of the turmoil in South-east Asia.