29 April 2010 | Lindsay Clark

Optimism over the economy is growing as signs from the labour market show private sector companies are looking to start hiring, according to research from professional services firm KPMG and the Chartered Institute of Personnel and Development (CIPD).

The survey of almost 800 employers signals that the UK’s emergence from recession is now leading to better job prospects.

The overall net balance between the percentage of employers expecting to recruit and those expecting to cut staff across all sectors of the economy is now positive (+5 per cent) for the first time since winter 2008. This represents an overall increase from -5 per cent in the previous quarter.

However, the research shows pessimism in the public sector. The net balance for the entire public sector is -43 per cent, the largest negative balance since the survey began in 2004. Falls in employment are particularly widely anticipated among local authorities and central government (-59 per cent), in education (-45 per cent) and in healthcare (-38 per cent).

Gerwyn Davies, CIPD public policy adviser and author of the report, said: "The recession represents a long, dark winter for the jobs market. However, a return to spring could mean a growth of full-time jobs in the private sector that may continue if the global economy continues to recover at the same rate.”

“In contrast, public sector employers will be looking to close the lid on employment, pay and promotion. This will present huge challenges to public sector managers in their attempt to keep employees engaged.”