LABOUR MARKET CONDITIONS REMAIN TOUGH
LABOUR MARKET CONDITIONS REMAIN TOUGH AS PREVIOUSLY INACTIVE WORKERS SEEK EMPLOYMENT
Weaker rises in both temporary and permanent employment
Vacancy growth remained substantial
Strong candidate availability subdued pay in permanent jobs market
A strong rise in the number of candidates seeking long- and short-term employment in Scotland led to a mild deterioration in overall labour market conditions in June. Nevertheless, employment and demand for staff continued to rise during the month, albeit at moderated rates.
Latest data from the Bank of Scotland Report on Jobs also highlighted a divergence in conditions in the temporary and permanent jobs markets, with the stronger rises in appointments, vacancies and pay all recorded in the short-term sector.
The overall deterioration of conditions was signalled by the Bank of Scotland Labour Market Barometer slipping below the 50.0 no-change threshold for the first time in seven months. Nevertheless, at 49.4, the pace of worsening was only marginal, and driven principally through improving candidate availability.
Although signalling labour market slack, the rise in candidate availability suggests that workers are looking for employment following a period of inactivity. This in turn may indicate a transitional phase in the labour market recovery as opposed to an outright deterioration of conditions.
May'09 34.8 35.5
Jun 37.0 38.9
Jul 39.4 40.2
Aug 40.2 43.1
Sep 44.1 46.3
Oct 46.2 48.5
Nov 49.6 52.8
Dec 51.6 54.7
Jan'10 52.0 55.1
Feb 52.9 56.4
Mar 54.2 56.5
Apr 54.3 56.8
May 52.3 56.4
Jun 49.4 55.8
50 no change on previous month.
Donald MacRae, Chief Economist at Bank of Scotland, commented: Scotlands labour market conditions deteriorated slightly in June due to a strong rise in the number of people looking for employment, causing the headline index to slip below the no-change threshold for the first time in seven months. However, permanent employment increased for the ninth month in a row, and demand for permanent staff improved, albeit both were at slower paces than previously. Despite Junes overall decline, the rise in candidate availability may point to a transitional phase in the Scottish labour market recovery, rather than outright deterioration.
Recruitment consultants based in Edinburgh recorded the strongest rises in both permanent and temporary employment in June, extending the current sequence to nine months.
Aberdeen-based agencies recorded the strongest monthly inflation of permanent salaries, while agencies in Edinburgh registered the most marked increase in hourly temp pay rates.
The fastest rises in both temporary and permanent candidate availability were seen by Dundee-based employment consultants.
Wages and salaries
Following four months of pay growth, Scottish recruitment consultants registered a decline in average salaries awarded to permanent workers in June.
In contrast to the trend recorded in the permanent sector, short-term workers saw a modest rise in hourly staff remuneration rates during June. This extended the current period of temp pay inflation to six months.
Latest data highlighted a further rise in the number of workers placed in permanent job roles by Scottish recruitment agencies. This extended the current period of rising appointments to nine months. However, the pace of increase slowed to the weakest since October 2009.
The seasonally adjusted Temporary/Contract Staff Billings Index signalled a marked rise in average weekly billings received from the employment of temporary staff. As in the permanent sector, however, the pace of increase slowed since May.
June data signposted another improvement in demand for permanent workers in the Scottish labour market. Although the weakest since February, the increase in vacancy numbers was strong and the seventh in successive months.
Demand for temporary workers, as reported by Scottish recruitment consultants, rose for the eighth month in a row during June.
Latest data highlighted a marked rise in the number of candidates seeking permanent employment in Scotlands labour market. Staff availability rose at the fastest pace in eight months.
June data signposted the strongest rise in temp candidate availability since September 2009. Firms operating in Scotlands recruitment sector have posted rising temporary staff availability in each month for the past two years.
By sector, higher vacancy numbers were seen in seven out of the eight monitored permanent employment types, with the strongest rise recorded in the Hotel & Catering sector.
For the second month in a row, all eight categories of temporary employment saw increased vacancy numbers in June. The strongest rise was recorded in IT & Computing, the weakest in Secretarial & Clerical.
Permanent Staff Temporary/Contract Staff
1 Hotel & Catering 1 IT & Computing
2 IT & Computing 2 Executive & Professional
3 Executive & Professional 3 Hotel & Catering
4 Accounts & Financial 4 Blue Collar
5 Engineering & Construction 5 Engineering & Construction
6 Nursing/Medical/Care 6 Accounts & Financial
7 Blue Collar 7 Nursing/Medical/Care
8 Secretarial & Clerical 8 Secretarial & Clerical
(Ranked by strength of demand in Scotland in June 2010)