LONDON (Reuters) – British employers’ willingness to hire and invest has fallen to its lowest since last year’s vote to leave the European Union, a survey by the recruitment industry showed on Wednesday.

The Recruitment and Employment Confederation said 29 percent of firms surveyed reported higher confidence in hiring and investment, but 20 percent were less confident than before. The positive margin was the narrowest since the REC started the survey in its current form in June 2016.

Employers’ confidence about the economy in general was the lowest since November.

“This drop in employer confidence should raise a red flag,” REC chief executive Kevin Green said.

“Businesses are continuing to hire to meet demand, but issues like access to labor, Brexit negotiations and political uncertainty are creating nervousness,” he added.

The REC data is based on a survey of 601 employers conducted between April 26 and July 10 by polling company ComRes. REC said the loss of confidence had intensified toward the end of the period.

It is unclear how much Britain’s government will curb immigration by EU workers after the country leaves the bloc in March 2019.

Prime Minister Theresa May has stuck with a long-standing, unfulfilled pledge to cut total net immigration to less than 100,000 a year. But finance minister Philip Hammond has said he wants to avoid any ‘cliff-edge’ change in 2019.

Official statistics last week showed that year-on-year growth in the number of non-British EU-born workers fell to a seven-year low in the three months to June.

The REC said staff shortages were most acute in the construction and health and social care sectors, both of which rely heavily on foreign staff.

Overall, 40 percent of employers said they had “absolutely no” spare capacity, up from 35 percent a year earlier.