The number of people taking up new jobs in Scotland fell sharply last month as companies looked to cut costs amid market uncertainty.
According to the latest Royal Bank of Scotland Report on Jobs survey compiled by S&P Global, the demand for both permanent and temporary workers deteriorated markedly during March. Pressure on salaries and hourly wages were historically muted, with the former recording the weakest increase in more than three years.
“The Scottish labour market continued to exhibit weakness which has now existed for the most part of the last one-and-a-half years," Royal Bank chief economist Sebastian Burnside said. "Latest survey data highlighted that uncertainty regarding the outlook and firms looking to cut expenses impeded hiring activity."
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Permanent staff appointments fell for the fourth consecutive month in March. The rate of contraction eased slightly from February's 15-month high but remained rapid overall.
Temporary billings rose above the neutral 50.0 mark for the first time since last December, but the rate of expansion was modest.
The number of candidates available to fill permanent roles fell, as did permanent vacancies. The decline in the former extended the run of decreases to 38 months, while the latter was down for the eighth month in a row.
Demand for permanent staff deteriorated across all the eight monitored sectors, with hotel and catering recording the fastest drop.
There was a sixth successive monthly rise in the number of candidates available to fill temporary roles. Recruiters linked the upturn to projects coming to an end, which helped to free up labour.
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In line with the trend for permanent roles, temporary job vacancies also fell, thereby extending the current run of contraction to eight months. The executive and professional sector recorded the fastest drop in demand for short-term staff, followed by hotel and catering.
Average starting salaries for permanent new joiners rose during March, with labour shortages and competition to secure suitably-skilled candidates putting upward pressure on pay. However, the rate of inflation moderated "notably" to the weakest in more than three years.
The first quarter of the year ended with a further rise in temporary wages across Scotland, thereby extending 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.
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