ONE in four employers are planning to hire staff in the coming months despite a slump in business confidence, new research shows.

The Recruitment & Employment Confederation (Rec) said the "fundamentals" of the labour market were strong, with employment at a record high.

But a survey of 600 employers confirmed an ongoing shortage of skilled workers amid concerns about what will happen to migrant labour following the EU referendum result.

Permanent and temporary vacancies in engineering, construction, health and social care are particularly difficult to fill due to a shortage of suitable candidates, the study found.

More than a quarter of public sector employers have made redundancies in the last year, compared to 16% private sector firms.

The survey also revealed that business confidence has weakened since the EU referendum.

Rec chief executive Kevin Green said: "Thanks to a resilient business-as-usual attitude from consumers since the referendum, demand on businesses has remained buoyant and this is reflected in employers saying they will actively expand their workforces in the coming months.

"This is good news, but there are question marks around the sustainability of positive trends we have seen since the referendum.

"Skills shortages are a major problem in many sectors, one that will only get worse if the supply of skilled EU workers is in any way curtailed.

"Employer confidence has fallen significantly, suggesting that while businesses continue to perform well, there is much anxiety about what the future holds."