'˜Underperforming economy' sees Scottish jobs slump to 7-year low

The number of Scots finding permanent work has slumped to a seven-year low and pay levels have flatlined, new research has found.

Scotlands jobless are finding it harder to secure work than people elsewhere in the UK. Picutre; Ian Georgson

The country’s economy is “under-performing” compared with the UK as a whole, prompting calls for Scottish Government action to boost growth. The impact of the North Sea oil slump has seen Scotland’s economy fall behind the rest of the UK in recent years.

December saw the steepest decrease in the number of people placed in ­permanent jobs by Scottish recruitment consultancies for more than seven years, according to the report by analysts Markit UK.

Kevin Green, of the Recruitment and Employment Confederation, said: “The jobs market in Scotland is going through a tough patch, with fewer people securing permanent jobs each month and salary growth slowing down.

“Scotland’s economy is under-­performing relative to the UK, the energy sector has weakened and the referendum result has brought uncertainty. These factors are all having a significant impact on business confidence.

“Employers are continuing to post vacancies in Scotland, which suggest that demand for staff is strong, but employers are showing hesitancy when it comes to making ­hiring decisions.

“It’s possible that the jobs market will pick up again quickly if confidence is shored up.”

The most recent official statistics show Scotland has an unemployment rate of 5.3 per cent, above the rate of 4.8 per cent for the whole of the UK.

The employment rate for those in work stands at 73.3 per cent north of the Border, below the UK average of 74.4 per cent.

The wider UK economy has also been growing at three times the Scottish rate, according to the most recent figures.

Today’s report shows that recent “marginal” decreases in those finding permanent jobs, was followed by the harshest fall last month since June 2009.

That contrasted with further – albeit slightly slower – growth in permanent placements across the UK.

There was also a sharp slowdown in growth of permanent salaries, which rose at the weakest rate seen in almost four years, the study found. Again, that put Scotland behind the UK average, experts said.

Scottish Conservative jobs spokesman Liam Kerr said: “What we need is a Scottish Government serious about business, stability and the economy. Instead, the SNP is still agitating over another referendum, and continues to pursue a number of anti-­business policies.”

Labour’s economy and jobs spokeswoman MSP Jackie Baillie said: “It is clear there are fundamental problems in Scotland’s labour market. This report is the latest warning signal and the SNP must not ignore it.”

But the Scottish Government’s minister for employability and training, Jamie Hepburn, said the country’s jobs market was resilient “in the face of notable economic headwinds”.

He added: “Scotland continues to outperform the rest of the UK on female and youth employment and has the second highest employment rate out of the four UK nations –but it is clear that result of the EU referendum has created uncertainty and weakened economic progress.”