Anxious PAYE umbrella contractors disappointed by the news from the Office for National Statistics that the UK has taken its second dip into recession may be heartened by the latest JobsOutlook report from the Recruitment and Employment Confederation, which suggests that the underlying picture is not as bad as the headline news might suggest.

While the contraction in the construction industry was largely responsible for the overall negative growth recorded in Q1 2012, during the same period employer confidence elsewhere actually grew to its highest point since March 2009, the REC report reveals.

The quarter was not without its wobbles. Although employer confidence rose between February and March, it did so less vigorously than between January and February. Even so, 44% plan to maintain current levels of agency workers (which include skilled contractors working through umbrella companies) and 34% intend to increase temporary staff in the coming quarter. 29% plan to do so over the next year.

Permanent roles are also on the rise: 72% of employers said that they would be recruiting permies over the next quarter and 69% plan to do so in the next twelve months.

Roger Tweedy, REC Director of Research, said: “The overall figures from quarter one are really positive. Looking forward, employers tell us they plan to make more job offers over both the short and medium term – particularly for permanent roles. Our measure of employer confidence has reached a record high point. But the growth in confidence was less than last month so it will be important to track whether increasing employer confidence is a continuing trend or whether it’s peaking.”

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