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Private sector small business can take up the slack from public sector cuts, says Manpower survey

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The UK’s employment outlook is the most positive it has been in three years, according to recruitment firm Manpower.

The Manpower Employment Outlook Survey, published yesterday, is based on responses from over 2,100 UK employers about whether they intend to hire additional workers in the coming economic quarter.

The positive national seasonally adjusted net employment outlook of +3% indicates employers are intending to create additional jobs in the next quarter; this compares with a net employment outlook of +2% in Q2 2011.

Within the private sector, it is only small and medium enterprises (SMEs) that are predicting job creation, with a +8% outlook. But hiring intentions among the UK's largest businesses have fallen for the third successive quarter and now remain flat.

The national outlook is positive for the seventh successive quarter and more positive than it has been since the height of the recession.

Finance, banking and business services is the most bullish sector, with a +10% outlook. Agriculture, transport, utilities and manufacturing sectors also all report positive hiring intentions.

The outlook in manufacturing, which dipped to a negative outlook during the recession, has bounced back to become one of the most positive sectors, with intentions of +6%, up five points compared to this time last year.

While the public sector continues to report a negative outlook, with hiring intentions of -2% in the next quarter, this negative public sector figure is not as pessimistic as before, calling into question the size of the cutback in the civil service.

Mark Cahill, UK MD of Manpower, said: "It seems when it comes to job vacancies, small is beautiful. Candidates sometimes assume that bigger is better when it comes to employers, but these statistics clearly point to the opposite.

"SMEs were among the first to shed jobs during the recession, but we are now seeing them build their workforce again and becoming an increasingly important source of job creation in the UK. The greatest unmet demand is for highly sought-after candidates in national skills shortage roles, such as engineers and IT specialists. Engineers have, it seems, become the new plumbers.

"We have been warned for such a long time to expect large scale public sector job cuts in central government, but in our experience that is just not happening. If the Government really intends to make the large-scale redundancies initially suggested, ministers must realise that the longer they wait to start this process the harder it will eventually become. Current conditions therefore do call into question whether the big redundancies will happen at all. As one of the leading providers of personnel to both government and the private sector, we are confident that job creation in the private sector, particularly among SMEs, can fill the gap created by job losses in the public sector."

Regionally, roughly half of employers are reporting positive hiring intentions. West Midlands leads the way with its +13% Outlook. East of England and the North East report +8%, the South West +7%, and London, the South East and Northern Ireland all expect +6%.

Scotland continues its prolonged negative outlook, with intentions of -7% for the next quarter; the region has not reported a positive outlook since Q2 2008. Wales slides back into negative territory with a -3% outlook, following two quarters of positive intentions.

At -2%, the North West reports its most negative outlook since the beginning of 2010.