Keith Brown told the Unite conference on Saturday that the economy is growing while the number of people in employment has risen and unemployment has fallen.
However he said withdrawal from the EU posed some “serious headwinds” and warned that a no-deal Brexit would be “catastrophic”.
He said Scotland would lose an estimated £11 billion a year by 2030 in that scenario, while there would be 80,000 fewer jobs.
Ensuring fair working conditions and defending employee rights are further challenges, the Economy Secretary said.
He told the conference in Aviemore: “Scotland’s economy continues to face some serious headwinds from Brexit and rising inflation and that’s very much tied into the Brexit decision.
“We also still have issues around insecurity and zero-hours contracts.
“While employment figures are very good we have to dig down into underemployment and exploitation.
“The Scottish economy is fundamentally strong and ready to meet these challenges.”
Mr Brown reiterated the Scottish Government’s position that Scotland’s interests would be best served by remaining in the EU and certainly within the single market.
He also said trade unions and Scottish ministers should work together to press the UK Government to devolve employment law to Scotland.
He said: “With the powers that we have, we have worked hard to tackle in-work poverty and support people on low incomes.
“For example, we have prioritised the extension of the real Living Wage which has helped contribute to Scotland having the highest proportion of employees paid at least the Living Wage of all four UK countries.
“We continue to condemn the use of exploitative zero-hours contracts and have set up a Fair Work Convention to support the fair pay and conditions agenda.
“However, we cannot rely on the UK Government to introduce fair work policies which align with Scotland’s inclusive growth agenda.
“I welcome the Scottish Trades Union Congress support for our calls to devolve employment law.
“We must continue to press the UK Government to reconsider their opposition to this and, as Economy Secretary, I will be taking all available opportunities to do so.” A UK Government spokesman said: “Employment in Scotland has risen close to record levels, supported by a strong economy and wider welfare reforms.
“The Scottish Government was given powers to develop employment programmes to help the long-term unemployed and disabled people into work.
“We look forward to seeing what these schemes deliver.”