EMPLOYER hiring confidence in the South East is cautiously optimistic for the third quarter of 2004.

This is according to Manpower, the UK's leading workforce management company.

The Manpower Employment Outlook Survey shows that the balance of employers looking to take on more staff in the South East is 10 per cent compared with a UK average of 14 per cent.

This represents a quarter-on-quarter decrease of one percentage point, but a year-on-year increase of five percentage points.

Mike Banyard, divisional director for Manpower in the South East, said: "Employers in the South East are feeling optimistic, but slightly cautious.

"Confidence may be down marginally on last quarter, but it's great to see it's up on last year, reflecting the general perception that the economy is prospering.

"We've seen an increase in permanent placements, which is a good indicator of business confidence in the area."

The Manpower Employment Outlook Survey provides a forecast of employer hiring intentions for the quarter ahead - July to September 2004.

A total of 2,500 employers were surveyed in the UK and more than 35,000 employers in 19 countries globally.

Mr Banyard added: "The financial services industry is an area in which we've seen high demand, both for permanent and temporary workers.

"This reflects the survey's national findings that show employer hiring confidence in the financial sector as the second highest of all.

"It's also encouraging that we've seen the number of public sector employers in the South East looking to recruit staff grow.

"It seems the South East is now starting to witness the skills shortage that many other regions have been reporting for some time.

"Fewer companies are investing in training, making it increasingly difficult for employers to find staff with the right skills for the job.

"Where we identify skills gaps, Manpower is able to offer free online training through our Direct Training service, which offers more than 1,000 courses in a diverse range of subjects."

Employers in 11 of the 12 regions surveyed intend to take on more staff for the quarter ahead.

Across the UK, eight of the nine industry sectors surveyed by Manpower are planning to take on staff next quarter.

Employers in transport and communications, finance and business services, construction, and manufacturing all reported figures above the national average.

However, the hotel and retail sector - often seen as a good indicator of consumer confidence - has declined by six percentage points over the last quarter.