More than half of companies in the UK plan to hire new workers next year.
This is the biggest proportion since 2008, but there is a fly in the ointment - more than half are not planning to give pay rises that will match inflation, meaning many British workers will keep getting poorer.
The Confederation of British Industry (CBI) surveyed businesses with Accenture and found that 51% plan to take on new staff, suggesting that recent drops in unemployment are likely to continue.
17% are planning to make redundancies, and economic shocks are still likely to have a negative effect.
Around a third of companies are planning to take on full time employees, but many will focus on part-timers suggesting that the problem of underemployment may grow further next year.
Around 1.4 million people in the UK are working fewer hours than they want, struggling to make ends meet on lower incomes.
Companies are still resistant to the living wage; while 43% saw some value in it as a voluntary commitment, only 12% backed a compulsory introduction.
Surprisingly, London and the south east are not leading the way in job creation; the most optimistic bosses were those in Yorkshire and Humberside and the East Midlands.
Four out of five firms said they expected new job opportunities for young people to open up in 2014, helping reduce the near-1 million who find themselves out of work.
Katja Hall, CBI chief policy director, said: “We’re starting to see the recovery have an impact on business plans to hire, with more than half of firms boosting staff numbers next year and more opportunities for young people. It’s good to see jobs being created across most regions, not just London and the south-east. Our labour market performed well throughout the recession and pay caution and flexible contracts will continue to underpin growth. For the UK to remain an attractive place to do business, as the recovery takes hold, wage growth must go hand-in-hand with growth in productivity.”
Pay caution means wages have lost touch with inflation over many years, meaning poverty is becoming entrenched among low-paid people.