The UK private sector continued to create jobs last month, but real economic growth remains elusive, a new report has stated.
BDO’s employment index hit a 19-month high in March, indicating a resurgence in private-sector hiring intentions.
It is the third consecutive month the measure has been positive and suggests UK private-sector firms are helping offset the effects of job cuts in the public sector.
Despite the increase in job numbers, BDO’s output and optimism indices a measure of turnover and business performance expectations in the two quarters ahead suggest tough economic conditions until mid-2013 at least.
The report showed service sector confidence moved up last month, while data for the manufacturing sector showed a significant decline with the depreciating value of sterlingcoupled with weak demand from domestic consumers and struggling eurozone import partners weighing on confidence.
“It is encouraging to see improvement in UK businesses’ hiring intentions, particularly in light of the imminent public-sector payroll cuts which will add pressure to the unemployment rate,” BDO partner Peter Hemington said.
“However, the plunging confidence of manufacturers is a particular cause for concern,” he said.
“It was disappointing to see little action taken in last month’s Budget to help this beleaguered sector.”