Flat or declining sales coupled with growing concern over the August 8 General Election have left dark clouds hanging over the labour market, Business Daily reports.
The news site banks on a newly released report that reveals that these factors have forced majority of employers to freeze plans to hire or raise workers’ salaries.
The job market survey, commissioned by the Institute of Human Resource Management (IHRM), found that 73 per cent of employers across 12 sectors have stopped new hiring.
More than 57 per cent of the firms also indicated that they will not increase employees’ pay this year while the remaining 43 per cent will marginally adjust salaries to compensate for inflation.
Slumping private sector
Last week, the Treasury said the economy is likely to expand by six per cent this year down from an initial forecast of 6.5 per cent, pointing to a slowdown in private-sector credit growth.
The study found that reduced private sector credit uptake and the freeze in expansion plans by investors awaiting the outcome of the August elections had slowed down the creation of new jobs.
“The subdued political climate in an election year, coupled with a slowdown in economic growth remains the biggest concerns for the majority of organisations at 95.2 per cent,” says the study.
Lending to business and individuals grew a paltry 4.3 per cent in the year to December 2016, down from 20.6 per cent a year earlier, making it the slowest credit growth in more than 10 years.
The credit squeeze means less money supply in the economy as well as sluggish demand for goods and services.