More look for work - but demand for staff also up

Published on Sunday 18 July 2010 14:51

Labour market conditions in Scotland deteriorated last month due to a strong rise in the number of people looking for jobs, according to a report published today.

The report's barometer dropped below the "no change" threshold of 50 for the first time in seven months, indicating a marginal deterioration.

However, demand for both permanent and temporary workers also increased last month, according to the Bank of Scotland Report on Jobs.

The study suggested the rise in candidate availability may indicate workers are looking for employment following a period of inactivity.

Bank of Scotland said this may indicate a transitional phase in the labour market recovery as opposed to an outright deterioration of conditions.

Donald MacRae, the bank's chief economist, said: "Scotland's labour market conditions deteriorated in June due to a 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."

In June the demand for permanent workers in Scotland rose for the seventh successive month while demand for temporary workers rose for the eighth month in a row.

In the permanent sector, the biggest rise in vacancies was in the hotel and catering sector, while in the temporary sector it was in IT and computing.

The report 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 findings follow the unemployment figures for June, which last week showed the number of part-time workers in the UK had risen to 7.8 million, the highest since the Official for National Statistics began keeping records in 1984.

In Scotland, the unemployment rate reached 8.1 per cent, higher than the 7.8 per cent for the UK as a whole. The number of unemployed people in Scotland rose by 8,000 to 216,000, while the total for the entire UK fell by 34,000 to 2.47 million.