Hiring intentions 'continue to grow' for UK firms

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Positive business sentiment continues to be witnessed in the UK

Businesses up and down the country are increasingly on the lookout for new members of staff, with firms reporting an increase in confidence and hiring intentions in recent months.

This is the conclusion of the latest Business Trends Report from BDO, which revealed a significant rise in its monthly Employment Index to 113 in March - significantly higher than the score of 103.4 that was reported during this same month last year.

Any figure above 100 denotes a positive sentiment among index respondents, but this dramatic annual increase places the index at a higher point than it has achieved since the mid-2000s.

However, with British worker productivity having remained static during the last two years - the longest prolonged period of stagnation recorded since the second world war - it means the UK is now unique among major developed nations in as far as the upturn in the economy has not coincided with a growth in individual output.

That said, BDO's latest results show ongoing strong sentiment regarding prospects for individual and business growth over the coming months, with its Output Index and Optimism Index standing at 103.9 and 104.9 respectively for March 2015.

Furthermore, the Inflation Index has fallen from 94.7 in February to 93.8 right now, marking ongoing deflationary pressures that could bode well for business confidence in the short-term.

Overall, companies across the breadth of the UK business landscape continue to feel the benefits of a strengthening economy and this is translating into growing positivity towards the recruitment of new staff and the expansion of services.

Responding to the findings, partner at BDO Peter Hemington commented: "While it is encouraging to see strong business confidence, the UK's continuing poor labour productivity performance is a very significant concern.  

"Although employment growth in recent years has been strong, much of this has been in part-time jobs. Productivity ultimately determines our prosperity so it is a crucial area that must be addressed.

"Policymakers of all persuasion must take on this productivity puzzle."