There were robust increases in both permanent appointments and temporary billings across Scotland during September, according to the latest Report on Jobs from the Bank of Scotland. The rates of growth, however, eased further from their respective recent highs.

There remained strong upward pressure on staff pay, particularly permanent starting salaries, as rising demand for employees contrasted with a further deterioration in candidate availability.

The Bank of Scotland Labour Market Barometer read 64.9 in September, indicating a further strengthening of Scottish labour market conditions. Although at a four-month low, the barometer remains at a level that is among some of the highest reported in the series history and above the equivalent UK index for the third consecutive month. An index of 50 indicates that there has been no change in the labour market compared with the previous month. 

Donald MacRae, Chief Economist at Bank of Scotland, commented: “September’s Barometer showed a continuing rise in the number of people appointed to both permanent and temporary jobs, although at a lower rate than recent highs. Starting salary pay rose strongly reflecting the growing lack of available candidates for vacant positions. The Barometer is showing almost four years of monthly improvement resulting in the rate of unemployment in September of 5.5%. The Scottish economic recovery continues.”

For the second month in a row, Aberdeen reported the steepest increases in both permanent staff placements and temporary billings, while Edinburgh recorded the slowest rates of growth on both fronts. Recruitment consultancies in Glasgow registered the most marked deterioration in permanent candidate availability, while the sharpest decrease in temporary candidate supply was seen in Dundee.

Permanent salary inflation was fastest in Glasgow, while the sharpest increase in temporary hourly pay rates was recorded in Dundee.

Permanent salary inflation remained above the historical series trend in September, despite having eased to its lowest ebb in four months. September’s survey showed a much slower increase in hourly pay rates for temporary/contract workers than the previous month, with the rate of inflation the weakest overall since April 2013.

September saw a marked rise in demand for permanent staff in Scotland, although the degree to which permanent job vacancies increased was the weakest in 11 months. Demand for temporary/contract staff continued to rise in line with the trend since November 2009. Although the weakest since May, the rate of growth in temporary job vacancies was still strong overall.

The rate of deterioration in permanent candidate availability remained close to August’s survey record, with more than half of panellists (53%) recording a decrease. The availability of candidates for temporary vacancies also worsened markedly during September, with the rate of decline sharper than in the previous month and among the fastest seen in the survey’s history.