Scots jobs market remains fragile amid uncertainty
The scottish labour market continued to display the weakness seen over the last 18 months, although output by UK firms has risen in a positive sign for the economy, according to two new studies.
Royal Bank of Scotland (RBS) has unveiled its latest Report on Jobs in Scotland, compiled by S&P Global, showing a “sustained” deterioration in permanent staff placements across Scotland during March, with this index scoring 42.6, below the 50 threshold separating con traction and growth. the rate of contraction eased slightly from February's 15-month nadir of 41.1, but remained rapid overall, and respondents said the latest downturn was linked to fewer vacancies, companies looking to cost cut, and increased market uncertainty.
Temp billings rose across Scotland last month, with this index increasing for the second straight month to post 51.1, above 50 for the first time since December, but the rate of expansion“modest… and weaker than the average recorded over the series history”.
Looking at the supply of candidates, March data revealed a fall on the permanent side to 45.2, extending the current run of decrease to 38 months, and Natwest-owned RBS said that despite the rate of contraction easing to the weak est since mid 2023, it remained sharp overall. On the flip side, a sixth successive monthly rise in temp candidate availability was recorded to reach 51.7. Recruiters linked the upturn to projects coming to an end, which helped free up labour.
The index for average starting salaries for permanent new joiners rose to 54.4, and labour shortages and increased bids to secure suitably skilled candidates turned up pressure on pay, panellists said. The first quarter of the year ended with a further rise in temp wages to 54.9, thereby extending the current run of inflation that began in December 2020.
RBS chief economist Sebastian Burnside said: “The Scottish labour market continued to exhibit weakness, which has now existed for the most part of the last one-anda-half years. Latest survey data highlighted that uncertainty regarding the outlook and firms looking to cut expenses impeded hiring activity.”