Confidence in the Yorkshire and Humber’s job outlook has fallen sharply, as skills shortages continue to impact the region.
The Manpower Employment Outlook Survey showed an eight percentage point drop in sentiment for the first three months of 2015, compared to the final quarter of 2014.
The region’s +2 outlook for early 2015 compares to an average of +7 around the country.
A perceived lack of candidates, both through low confidence among employees and a shortage of people with specific skills has fuelled the drop, the recruitment firm said.
Amanda White, operations manager at Manpower, said: “As many candidates are still cautious about looking for new roles despite the improving economy, many employers are struggling to fill vacancies.”
Engineering and IT roles are particularly affected, as well as sales jobs and positions requiring secretarial skills.
Despite the sharp drop in confidence across Yorkshire and Humber, the region remains positive, Ms White said.
“While optimism is lower, there are still some very buoyant areas, such as Sheffield and Hull,” she said.
“There’s a real sense of buoyancy in the Humber, especially Hull, and a lot of that comes from the City of Culture award.”
The firm is also seeing “good strength” in the permanent job market, Ms White said.
“Having exited the recession, businesses are looking to hire on a permanent basis, instead of deciding to see how it goes with temporary staff,” she said.
Certain sectors have seen a resurgence, with sentiment in construction at its highest since before the recession, Manpower said.
Its findings follow research from Hays, which tipped the construction and engineering sectors for strong salary growth, in part due to skills shortages.
The drop in job confidence comes as the Bank of England warned hundreds of 300,000 more households could face arrears when interest rates rise.
The number of homeowners that fall into arrears increases significantly when mortgage repayments go over 40 per cent of gross income, which is already the case for 360,000 households.
An interest rate hike to 2.5 per cent would see the number of families struggling to pay their mortgages rise to 480,000 in the event that wages increase by 10 per cent over the same period.
The figure increases to 660,000 if pay stays the same.
However, the Bank said a gradual rise in interest rates from current historic low of 0.5 per cent is unlikely to have “unusually large effects” on household spending.