Hiring plans near the 2007 record

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Companies’ hiring intentions are set to rise to a record high later this year, according to the latest Business Trends report.

The BDO Employment Index, which predicts businesses’ hiring intentions over the next three months, jumped to 107.7 in May from 105.6 in April - only just below the record in the report’s 22-year history of 108.9 in February 2007.

It indicates that companies plan to continue bolstering workforces above the long-term average rate over the next three months.

While this will be welcome, there is the risk that skills shortages will emerge in certain sectors. Strong growth among UK manufacturers in particular could be at risk.

BDO’s Manufacturing Optimism sub-index, which looks at growth expectations over the next six months, rose to 121.0 in May, well above the 100 mark that reflects long-run average growth.

Terry Jones, of BDO LLP in Yorkshire, said: “Businesses are translating their confidence in economic recovery into action, demonstrated by the increase in hiring.”