Is Scotland's jobs market cause for optimism?

As we head towards the end of a much-disrupted 2020, much remains uncertain, not least the extent of restrictions in Scotland in coming months.

Further challenges are forecast for the Scottish labour market. Picture: SNS Group.

The recently published State of the Economy report from the Scottish Government’s chief economist Gary Gillespie noted that in June around a third of Scotland's workforce was furloughed, which fell to about 15 per cent at the end of August, equivalent to around 217,000 jobs.

He also warned that many jobs may not be considered viable against the backdrop of an economy whose path “remains fragile”.

But some green shoots of hope have emerged in the form of new data out today regarding the jobs market north of the Border.

This includes the Royal Bank of Scotland’s (RBS) latest Scottish labour market report, which found the downturn in permanent placements across Scotland eased further in September on the back of some easing of lockdown measures.

It found the latest fall, with the headline permanent placements index coming in at 48.3 from 45.6 in August, was the softest in the current eight-month sequence of decline and only “modest”. The trend in Scotland, however, contrasted with the UK-wide picture, where permanent staff appointments rose for the second month in a row.

Temporary billings returned to growth at 55.8, with the first rise in temp billings for ten months, and the rate of expansion both the quickest since September last year and “sharp”. This was helped by firms reopening and efforts to clear backlogs.

There was also a boost in the supply of permanent candidates across Scotland, extending the current sequence of growth to four months, and buoyed by coronavirus-related redundancies. This index reached 75.

Also reflecting strong candidate availability is newly published job market data from UK job board CV-Library, which found job applications were up by 14 per cent across Scotland last month. The overall application-to-job ratio saw a year-on-year jump of 56.3 per cent.

There were spikes across key cities as Scots prepare for the furlough scheme to end. In fact, the application rates were as follows - Stirling (a year-on-year jump of 77.2 per cent), Inverness (37.7 per cent), Perth (27.6 per cent), Edinburgh (23.9 per cent), Dundee (22.1 per cent) and Glasgow (8 per cent). However, they fell by more than a third in Aberdeen.

When looking at the amount of job opportunities on offer, vacancies were down by 27.1 per cent across Scotland. The biggest drops in advertised jobs were seen in Aberdeen (down 50.2 per cent), with Glasgow down 37.1 per cent and Edinburgh 34.1 per cent, for example, but up by nearly 5 per cent in Dundee.

CV-Library also said that while job numbers are much lower than a year ago, they are picking up every month. In fact, vacancies in Scotland rose by nearly 40 per cent in September compared to August.

What do the experts say?

Sebastian Burnside, chief economist at RBS, said the lender’s September survey data highlighted a “slightly improved” picture for the Scottish labour market. But he also warned that despite an improvement in hiring since the height of the pandemic, “we have not yet seen a recovery by any means, and stricter lockdown measures amid a resurgence of the virus poses a risk to the outlook”.

He said: “The UK furlough scheme ends in less than a month, superseded by the less extensive Job Support Scheme. Consequently, there will be further challenges ahead for the Scottish labour market, with the potential for any steps towards a recovery to be lost if job-cutting intensifies.”

Lee Biggins, founder and chief executive of CV-Library, said: “Every week, we’re seeing more jobs being advertised on our site and, while vacancies are nowhere near levels that they were at a year ago, this is a promising indicator that the job market is headed in the right direction.”

But he also noted the imminent end of the furlough scheme, and said while the Job Support Scheme will be in place, professionals “are clearly nervous about their prospects and competition for jobs is ramping up”.

He said: “We know that many businesses and job-seekers are still struggling and are worried about what a second wave will mean for their prospects. All we can do for now is sit tight and weather the storm through the autumn and winter months.”

Also commenting was Jamie Rutherford, director of specialist employability service Enable Works, who pointed out that by the end of this year, unemployment in Scotland is expected to increase to 8.2 per cent.

But he also said the UK Government’s Kickstart scheme, “which in effect funds a young person into employment, presents a great opportunity”.

He said: “We are inviting employers to join a growing group of businesses that are committed to supporting young people, and to empowering them to enter and stay in the workforce for all of our mutual benefit ... a vibrant and active workforce is the route out of the economic crisis we face, and to ensuring that an entire generation of young people is not lost."

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