Demand for staff boosts Scottish jobs market

Latest survey data shows that the Scottish recruitment market regained momentum in February, with both permanent staff placements and temporary staff billings rising at faster rates than in the previous month. Strong growth of demand for staff, combined with persistent skill shortages, put upward pressure on pay with ñ permanent staff salaries rising at the highest rate since April 2004. Meanwhile, the rate of deterioration in candidate availability eased substantially from January.

Summary for February 2005
The reportís unique ëBarometerí pointed to a nineteenth successive month of improving conditions in the Scottish jobs market. The rate of improvement quickened from January and was marginally above the UK average.

All four components of the barometer continued to exert positive influences on it, with three making stronger contributions than in the previous month.

Growth of staff appointments was slightly sharper than in January, while demand for staff expanded at the most marked rate in four months. Average pay inflation also accelerated during February, to the highest level in nine months.

The only component of the barometer to make a weaker (albeit still positive) contribution than in January was candidate availability, with the rate of deterioration easing again, indicating a further slowdown in the pace of labour market tightening.

Commenting, Tim Crawford, Group Economist at Bank of Scotland, said:

ìThe Scottish labour market remained healthy in February, with the rate of improvement in conditions accelerating for the first time in four months. Strong demand for staff underpinned a further rise in recruitment activity, which combined with persistent skill shortages, pushed pay inflation to its highest level for nine months.î

Regional analysis - ëRecruitment activity growth remained strongest in Aberdeení
Aberdeen continued to post the sharpest recruitment activity growth. Strong growth was also recorded in Glasgow and Edinburgh. However, the number of permanent placements in Dundee fell from the previous month.

Aberdeen also recorded the strongest growth in temporary/contract staff billings. Billings were also up in Glasgow, but fell in Dundee and Edinburgh.

Permanent staff availability deteriorated in all four of Scotlandís main cities, with Dundee registering the sharpest decline. Temporary staff availability fell in three cities, with Aberdeen recording the sharpest deterioration. Only in Glasgow did availability rise.

Aberdeen recorded the strongest inflation of pay rates for both permanent and temporary staff.

Wages and salaries - ëPay inflation acceleratedí
Strong demand for staff and skill shortages amongst the available pool of candidates contributed to a further increase in average pay rates, with inflation sharpening from the previous month.

Scottish recruitment consultancies reported that starting salaries awarded to people placed in permanent jobs rose for the twentieth consecutive month.

Inflation of permanent staff salaries accelerated to the strongest in ten months. Temporary/contract staff pay rates were also up, but inflation slowed to the weakest rate since June 2003.

Employment - ëRecruitment activity growth picked upí
Permanent staff placements in Scotland expanded at a pace that was marginally quicker than in January, but growth remained below the UK average.

Consultancies linked the latest rise in placements to robust demand for staff resulting from sustained growth of activity and generally good business confidence at clients.

Growth of temporary staff billings quickened to the sharpest in three months, at a rate comfortably above the UK average. This was attributed to increased workloads at clients.

Vacancies - ëMarked improvement in demand for staffí
Demand for permanent staff was up for the twenty-first consecutive month. Moreover, the rate of improvement in demand hardened significantly.

Demand for temporary staff also rose at a faster pace, with the rate of improvement quickening to the sharpest in three months.

The rate of decline in permanent staff availability eased to the slowest for eight months, but remained sharp. Temporary/contract staff availability also declined at a less marked pace ñ the slowest for eleven months.

Sectoral - ëAll types of permanent staff recorded improvements in demandí
In February, recruitment consultancies reported stronger demand for all types of permanent employee. Demand rose for seven categories of temp staff, with only Secretarial & Clerical staff recording a decline from the previous month.

The strongest improvement in demand for permanent staff was seen for IT & Computing staff. For temporary staff, Nursing/Medical/Care staff registered the most marked improvement in demand.

UK regional labour market summary
In Scotland, the number of people registered as jobless and seeking work continued to fall. Official data showed that the claimant count was 86,200 in December, down 1,500 from the previous month. This equated to 3.3% of the working population, unchanged from December.

The number of people registered as unemployed and looking for work at UK job centres fell to 813,200 in January, from Decemberís downwardly revised figure of 824,200.

The lowest unemployment rate was found in the South East (at 1.5%), followed by the South West (at 1.6%). The highest unemployment rates were again seen in Northern Ireland and the North East (at 3.5% and 3.7% respectively).