The number of UK sectors hiring new staff reached the highest level for six months in April, according to the Bank of Scotland UK Sector Tracker.
In April, 10 out of the 14 UK sectors monitored by the tracker increased headcount – four more than in March, and the highest level since October 2022.
The property sector hired at the fastest pace (59.1), followed by software and services (58.5), as greater availability of labour and stronger expectations of future output growth drove recruitment.
A reading above 50 indicates expansion, while a reading below 50 indicates contraction.
In April, mentions of staff shortages by businesses surveyed by the Tracker fell to a 14-month low.
Meanwhile, the measure of future output growth expectations over the 12 months across the economy rose to its highest level in 13 months (71.4), as businesses were less concerned about the effect inflationary pressures will have on output over the coming year.
Automobile and auto part manufacturers reported the strongest output growth expectations (83.3), followed by software and services (82.5) and food and drink manufacturing (81.3).
However, reports of wage pressures increased further during April – a factor that could impact the trajectory of inflation.
Jeavon Lolay, head of economics at Lloyds Bank Corporate Banking, said: “Our report suggests that hiring activity is firming again as, alongside a pick-up in activity levels and improving confidence, many businesses reported that it was easier to recruit staff.
“Nevertheless, while labour availability may have improved, competition for staff is still intense in some industries and rising wages were increasingly cited as a key reason for raising output prices in April.
“As this was particularly the case for firms in the service sector, where wages typically account for a larger share of costs, economists will continue to focus more closely on inflation trends here to assess whether the Bank of England will hike interest rates again next month.”
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