Scotland’s unemployment rate falls to 25-year low

Keith Brown will be boosted by the fall in unemployment
Keith Brown will be boosted by the fall in unemployment
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Scotland’s economic turnaround was boosted again yesterday as the jobless rate fell to a 25-year low.

A massive 19,000 decrease in unemployment to 104,000 in the three months to May means the number of people out of work is back to the levels last seen before the recession, while the number of people in work soared by 25,000.

It also indicates that Scotland is now outperforming the wider UK economy in a marked reversal from the start of the year when the picture north of the Border was “lagging behind”.

The latest news comes after Scotland escaped recession last week with a rise in GDP of 0.8 per cent for the second quarter of the year, four times the UK rate of growth. Scotland’s economy had shrunk in the previous quarter. Returning confidence in the North Sea oil and gas sector has helped boost growth, while Scots exports are also up as a result of the weak pound.

Economy Secretary Keith Brown said: “These latest figures show our labour market remains resilient and robust with unemployment now at a record low.

“Our employment rate is also rising, which is good news, and means 25,000 more people are in employment compared to the last quarter.

“When considered alongside the fact that last week’s GDP stats show Scotland’s growth rate over the last quarter to be four times that of the UK, this is further evidence of the strength of the Scottish economy.”

Across the UK, unemployment fell by 64,000 to 1.49 million in the three months to May, meaning the jobless rate is at its lowest since 1975, at 4.5 per cent, according to the Office for National Statistics. But this is above the Scottish jobless rate of 3.8 per cent which marks a 25-year low.

The number of people classed as economically inactive Scotland – those who have effectively stopped looking for work – was also down by 2,000, the figures showed.

This compares with the situation in January when unemployment soared in Scotland by 11,000, with the 5.1 per cent jobless rate above the rest of the UK. The number of Scots in work, covering the three months to November 2016, was down by 14,000 meaning the employment rate was also more than a full percentage point below the UK rate of 74.5 per cent.

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said the jobless rate of 3.8 per cent is an “outstanding achievement” compared with the rate of 4.5 per cent across the UK as a whole.

But she added: “Compared to this time last year, there are now 6,000 fewer people in employment in Scotland, whilst 65,000 more people are economically inactive.

“These numbers highlight the continuing challenge facing the Scottish economy at a time when businesses are seeking staff with the right skills to help them grow.”

Colin Borland, the Federation of Small Business’ head of devolved nations, also warned that some Scottish businesses are reporting “rising skills and labour shortages”.

“Therefore, as Brexit negotiations continue it is even more important that no matter when they arrived, European nationals who work for or run businesses in Scotland must be allowed to stay,” he said.

Scottish Conservative economy spokesman Dean Lockhart said the figures show that Scottish businesses have been resilient to any “challenges thrown up by Brexit”.

Labour’s Jackie Baillie welcomed the fall in unemployment, but pointed to the rise in economic inactivity over the year of 40,000.

She said: “There is no room for complacency from this nationalist government.”