Permanent Placements Rate in 7-month Low
The latest Bank of Scotland Report on Jobs signalled a softening of Scottish labour market conditions in June.
Greater demand for staff contributed to a further rise in permanent placements over the month, but the increase was the weakest since January. Temp staff billings meanwhile declined from May. Differing trends were seen in permanent and temporary staff availability, while average salaries fell during June.
The Bank of Scotland Labour Market Barometer – a composite indicator designed to provide a single figure snapshot of labour market conditions – registered 52.3 in June, signalling a further improvement in Scottish job market conditions. However, down from 54.8 to a five-month low, the Barometer indicated only a modest improvement over the month.
Donald MacRae, Chief Economist at Bank of Scotland, commented: “The Report on Jobs for June showed vacancies continuing to rise and an increase in the numbers of people appointed to permanent jobs. However the rate of growth slowed showing a weakening in labour market conditions. The Scottish economy is struggling to maintain growth momentum in the face of the global slowdown. ”
Recruitment consultancies based in Glasgow reported the strongest increase in permanent placements in June. Temp staff billings meanwhile fell to the greatest extent in Aberdeen. Aberdeen-based recruitment agencies reported the strongest improvement in candidate availability for both the permanent and temporary job markets. The greatest reduction in permanent salaries was posted in Dundee, while the fastest fall in temp hourly pay rates was recorded in Aberdeen.
Permanent salaries fell for the first time in five months, with the rate of decline the strongest since September 2010. Temp hourly pay rates were broadly unchanged in June, with recruitment agencies only reporting a fractional reduction from May.
The number of candidates placed into permanent work rose for the sixth consecutive month in June, but the latest increase was the joint-weakest in this sequence. Temp staff billings fell modestly over the month, with the rate of decrease the sharpest since last November.
Scottish recruitment consultancies reported the slowest increase in permanent vacancies since February. Vacancy growth for the temporary labour market remained strong, but nonetheless eased to a three-month low in June.
The availability of permanent staff fell to the greatest extent in over four years. Temp availability rose for the second month running in June.
Five sectors posted a larger number of permanent vacancies in June, led by IT & Computing. However, the Executive & Professional, Nursing/Medical/Care and Blue Collar sectors all saw a decrease from May. June data signalled that temp vacancies increased in all eight employment sectors. IT & Computing continued to post the strongest rate of vacancy growth, while the weakest was reported for Nursing/Medical/Care.
A key tool in the Monthly Labour Market Report is the Bank of Scotland Labour Market Barometer. The Barometer is a composite indicator devised from four key measures: demand for staff; employment; availability for work inverted); and pay in the permanent and temporary markets.
The Bank of Scotland Labour Market Barometer continued to post above the 50.0 no-change mark in June, signalling a further improvement in Scottish job market conditions. However, having fallen to 52.3 from 54.8 in May, the Barometer was at its lowest level since January and below the long-run series average of 53.4. Scotland continued to outperform the UK average, with the Barometer remaining above the equivalent index for the UK as a whole. UK-wide data for June signalled the first overall deterioration in labour market conditions in 2012 so far.
Three constituents of the Bank of Scotland Labour Market Barometer exerted a positive effect in June, with the only exception average pay.
The Labour Market Barometer from Bank of Scotland is an average of survey indices relating to the demand for staff, permanent placements, temporary billings, staff availability, salaries awarded to permanent staff and average hourly rates for temp/contract staff.