Scots jobs market cools in June but beats UK average

The labour market in Scotland showed signs of cooling in June but permanent placements continued to outperform the rest of the UK, according to the latest sector data.

RBS finds growth slowed in temporary and permanent roles last month. Picture: Philip Toscano/PA Wire

Permanent jobs growth in Scotland slowed last month, with temporary billings also declining for the first time in 18 months, the Royal Bank of Scotland said.

Its jobs report, which monitors around 100 Scottish recruitment and employment consultancies, showed the number of vacancies in Scotland rose at weaker rates, while demand for permanent staff increased at its slowest pace since January 2017.

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Growth in temporary job openings also slipped to below its 12-month average.

Permanent staff appointments increased during June, contrasting with the UK average which recorded a decline for the fourth month running.

Starting salaries and temporary pay rates both increased markedly, maintaining momentum from May.

Sebastian Burnside, chief economist at Royal Bank of Scotland, said: “Latest survey data revealed some signs that, although labour market conditions are improving, hiring activity has started to cool.

“Growth of permanent staff demand eased for a third month running to the slowest in nearly two-and-a-half years, while temporary job vacancies also grew at a weaker pace.”

The findings by RBS come as a separate report revealed that the number of permanent placements by UK recruitment agencies has fallen for four months in a row due to continuing political and economic uncertainty.

Vacancies for temporary jobs are expanding at a historically “subdued” pace, according to research among 400 firms by the Recruitment and Employment Confederation (REC) and KPMG.

There were also fewer candidates for jobs last month, with the study noting consistent shortages of suitable applicants for vacancies such as large goods vehicle and forklift drivers, healthcare assistants, and manufacturing and production staff.

James Stewart of KPMG said: “Brexit stagnation continues to seize up the jobs market as the slowdown in recruitment activity continues.

“As we approach the summer holidays, the worry is that vacancy growth – which held close to a multi-year low in June – is unlikely to bounce back as firms take a relatively cautious approach to hiring.

“Conditions across the labour market are likely to remain restrained against a backdrop of political and economic uncertainty before companies can start to make more informed decisions on their long-term hiring.”

Neil Carberry, chief executive of REC, added: “The gentle slowdown in permanent hiring and slower growth of temp billings is a reminder to all politicians that businesses and employees across the country are looking for a smooth path to a negotiated Brexit outcome.”