Job market confidence climbs to highest level since 2008

The households' perceptions of job prospects remained stable while their optimism about job security rose to the highest level since May 2008, a recent report from Lloyds Bank has revealed.

After a period of strong growth that started in the spring, the net balance of the employment prospects index was unchanged during August. However, there are signs that the pickup may be beginning to feed through to pay growth and, if sustained, this could help to support household spending over the next few months.

Furthermore, the share of households who perceived an improvement in job opportunities compared to a year ago rose by 2 points to 24%, the highest level since March 2005. However, this improvement was offset by a corresponding jump in those who saw a deterioration to 46%

The net balance for job security among those in work rose by three points on the month to a five year high, driven by both an improvement in household optimism (up 2 points to 19%) and a fall in pessimism (down 1 point to 28%).

The rise in security perceptions over the past two quarters has also been replicated across most of the UK with only the East and East Midlands showing a decline, while the South West, West Midlands and Scotland have registered the most substantial gains.

The recovery in job prospects over the last six months, on the other hand, has been broad-based across all the regions, with the South West, Wales, South East, North West and Scotland showing the greatest gains (the only exception being the North East area).

Taking the average of the job prospects and security indices together indicates that the labour market outlook is currently particularly buoyant in the South West and South East, while London and the North East are comparatively subdued.