Scottish jobs market takes turn for worse amid mounting economic uncertainty - RBS report

Hiring activity across Scotland slumped last month amid growing economic uncertainty, according to a Royal Bank of Scotland snapshot.

The bank’s latest Report on Jobs showed that both permanent staff appointments and temporary billings contracted during October. Permanent placements have now fallen in two of the past three months, while the downturn in the temps sector was the first seen since August 2020.

Recruitment and employment consultancies polled for the report reported the downturns amid a backdrop of growing economic uncertainty, softening demand conditions and the deepening cost-of-living crisis. The October findings also pointed to further increases in starting salaries and temp wages. However, rates of inflation continued to ease, signalling a “mild waning” of pressure on pay.

Sebastian Burnside, chief economist at Royal Bank of Scotland, said: “Labour market conditions across Scotland deteriorated in October, as for the first time since August 2020, both permanent placements and temporary billings contracted. At the same time, rates of vacancy growth for both permanent and short-term staff continued to ease.

“Candidate and skill shortages meanwhile stretched the supply of labour thin, with recruiters also noting that increased economic uncertainty had impacted candidate numbers. Though it does seem that market imbalances are becoming less pronounced, the effect on pay remains strong.”

He added: “The data therefore suggests that growing uncertainty about the economy and the cost-of-living crisis is already affecting the labour market, and could weigh further on hiring decisions for the remainder of the final quarter of 2022.”

The report, compiled by S&P Global, is based on a monthly survey of around 100 recruitment and employment consultants.