Labour market figures for June

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.


Donald MacRae, Chief Economist at Bank of Scotland, commented:

“Scotland’s 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 June’s overall decline, the rise in candidate availability may point to a transitional phase in the Scottish labour market recovery, rather than outright deterioration.”


Availability

· Latest data highlighted a marked rise in the number of candidates seeking permanent employment in Scotland’s 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 Scotland’s recruitment sector have posted rising temporary staff availability in each month for the past two years.



Sectors

· 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.

The key source of weakness was strong candidate growth in both long- and short-term labour markets. Overall pay rates also fell fractionally, driven by a modest reduction in starting salaries awarded to permanent workers.