Scottish recruiters recorded a fourth consecutive monthly fall in permanent staff appointments during March, according to the latest Report on Jobs by the Royal Bank of Scotland and S&P Global.

The rate of contraction eased slightly from February's 15-month high but remained rapid overall. According to respondents, the latest downturn was linked to fewer vacancies, companies looking to cost-cut and increased market uncertainty.

Permanent placements also fell at the UK level, although at a softer pace than that seen in Scotland, according to the recently published UK Report on Jobs by the Recruitment and Employment Confederation.

Meanwhile, temp billings rose across Scotland during March. The respective seasonally adjusted index increased for the second straight month to post above the neutral 50.0 mark for the first time since last December. The rate of expansion was modest though and weaker than the average recorded over the series history.

At the same time, the downturn in temp billings across the UK as a whole continued into March and was the most pronounced since July 2020.

When it comes to labour supply, March data showed a fall in permanent candidate availability in Scotland, which extended the current run of decrease to 38 months. Despite the rate of contraction easing to the weakest since mid-2023, it remained sharp overall.

In terms of temp candidate availability, there was a sixth successive monthly rise in March. Recruiters linked the upturn to projects coming to an end, which helped free up labour. The rate of growth softened to a five-month low and was modest overall, however.

When it comes to starting salary, average starting salaries for permanent new joiners rose across Scotland in March. Labour shortages and increased bids to secure suitably-skilled candidates exerted upward pressure on pay, noted panellists. That said, the rate of inflation moderated notably to the weakest in just over three-years.

The first quarter of the year ended with a further rise in temp wages across Scotland, which extended the current run of inflation that began in December 2020. While the rate of growth across Scotland trended above the UK-wide average, the increase was the weakest in six months and historically muted.

The Report on Jobs also saw recruiters across Scotland record an eighth consecutive monthly fall in the number of permanent vacancies in March. Demand for permanent staff deteriorated across all the eight monitored sectors, with Hotel & Catering recording the fastest drop in permanent vacancies.

In line with the trend for permanent roles, temporary job vacancies in Scotland fell in March, which extended the current run of contraction to eight months. Executive & professional recorded the fastest drop in demand for short-term staff across the monitored sectors in March, followed by hotel & catering.

Sebastian Burnside, chief economist at Royal Bank of Scotland, said, “The Scottish labour market continued to exhibit weakness which has now existed for the most part of the last one-and-a-half years. Latest survey data highlighted that uncertainty regarding the outlook and firms looking to cut expenses impeded hiring activity.”

“Additionally, demand for both permanent and short-term workers worsened for the eighth successive month, with recruiters recording fewer jobs available across Scotland,” Burnside added.

“Meanwhile, though scarcity of suitably-skilled labour drove a further increase in permanent starting salaries during March, worsening hiring conditions meant pressures on pay eased. The rates of both starting salary and hourly wage inflation trended below their respective long-run averages,” Burnside said.