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PERMANENT EMPLOYMENT IN SCOTLAND FALLS

PERMANENT EMPLOYMENT IN SCOTLAND FALLS FOR FIRST TIME IN TEN MONTHS
Employment in permanent sector declines, while temporary jobs growth slows
Weaker vacancy growth recorded in both permanent and temporary sectors
Rising availability continues to subdue pay pressures
Scottish labour market conditions remained challenging in July. Permanent appointments fell for the first time in ten months, while growth of temporary employment slowed to the second-weakest in the current eleven month period of job creation.
Vacancy numbers continued to increase, although rates of demand growth slowed for both permanent and temporary staff. In terms of remuneration, strong candidate availability acted to subdue pay pressures in the latest survey period.
Overall, the Bank of Scotland Labour Marker Barometer pointed to a deterioration in jobs market conditions for the second month in a row in July. At 48.1, down from 49.4, the index was the lowest since October 2009. However, the pace of worsening signalled by the barometer remained marginal and partly driven through excess candidate availability, as previously inactive workers return to the labour market. Conditions in the UK (as signaled by data produced in the KPMG/REC Report on Jobs) improved at a marked pace in July.
Donald MacRae, Chief Economist at Bank of Scotland, commented: Unfortunately we saw the first fall in the number of appointments to permanent jobs in ten months. However, temporary appointments rose for the eleventh month in a row. The number of vacancies also continued to grow, albeit at slower rates for both permanent and temporary jobs. Previously inactive workers returned to the jobs market again during July, resulting in the number of candidates seeking employment rising at marked rates. This was the main reason behind the marginal deterioration in job market conditions. Overall, July was a challenging month for the Scottish employment market.
Regional analysis
For the tenth month in a row, Edinburgh-based recruitment agencies posted the strongest rises in both permanent and temporary appointments during July.
The steepest rises in both temporary and permanent candidate availability were recorded by consultants operating in Glasgow.
Permanent starting salaries fell across three of the four monitored regions in July, with Aberdeen-based agencies reporting unchanged salaries in July. Temp hourly pay rates rose in two of the monitored regions.
Wages and salaries                                                                       
Scottish recruitment agencies recorded the second reduction in permanent pay in a row during July. Although modest, the pace of decline was the fastest since December 2009.
In contrast to the trend recorded in the permanent sector, recruitment consultants reported a seventh successive rise in hourly temp pay rates.
Employment
The seasonally adjusted Permanent Staff Placements Index signalled a modest reduction in the number of workers placed in permanent job roles by Scottish recruitment agencies in July. This brought to an end a nine-month period of growth.
In contrast to the trend in the permanent jobs market, Scottish employment agencies registered a solid rise in the number of candidates placed in temporary job roles during July.
Vacancies
According to the latest data, demand for permanent workers increased for the eighth month in a row during July. However, the pace of improvement slowed for the second month running.
In the temporary sector, demand for staff rose at a strong clip in July, albeit at a marginally weaker pace than registered in the previous survey period.
Availability
Latest data signalled that the availability of candidates seeking permanent employment in the Scottish labour market improved for the twenty-eighth month in succession during July. Nonetheless, the pace of increased slowed since June.
July data signposted a strong rise in temporary candidate availability that was the steepest since September 2009.

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