Hiring activity across Scotland surged again in February at a near-record pace, with “no signs” that the labour market is cooling.
According to today’s latest jobs report from the Royal Bank of Scotland, permanent placements increased at the third-highest pace on record, while temporary billings rose for the 18th month in a row.
The strong demand for staff was attributed to improved employer confidence, and companies starting new projects that required additional staff.
As the need for staff picked up the number of unfilled permanent jobs grew at the fastest pace since November. Demand for temporary workers during February accelerated at a “historically marked pace”.
Staff availability across both categories continued to fall with the rates of decline “rapid”, although the deterioration eased from January.
Starting salaries for permanent employees increased at the second-highest rate on record. Meanwhile, the uplift in short-term pay rates was said to have remained “sharp”.
READ MORE: Shortages of workers drive wages higher, but inflation eats into real earnings
“Midway through the first quarter of the year, the labour market remains in a strong position with no signs that momentum is cooling,” Royal Bank chief economist Sebastian Burnside said.
The rate of increase in permanent placements in Scotland was little-changed from January, and was sharper than the UK-wide average. By contrast, the increase in UK temporary billings outpaced that in Scotland.
Looking in further depth at the permanent job market, the availability of candidates in Scotland fell for the 13th month in a row. The Royal Bank said anecdotal evidence suggested this was driven by skills shortages and a continuing reluctance among workers to switch jobs because of the uncertainty of the pandemic.
Average salaries awarded to new starts rose for the 15th month in a row and quickened for the first time in three months. The rate of inflation was broadly in line with that for the UK.
The availability of temporary workers declined for a 12th consecutive month. The rate of deterioration eased to a three-month low, but was still considerable when compared to historical data.
The increase in average hourly pay for short-term staff across Scotland extended the current sequence of inflation that began in December 2020, two months prior to the onset of the Covid pandemic.
READ MORE: Scotland's employment rate falls behind UK's, but wages surge
Although high by historical standards, the latest increase in hourly pay was the slowest since July and weaker than that recorded across the UK.
The increase in permanent Scottish vacancies outpaced the UK average, with the IT and computing sector recording the fastest rise in demand. This was followed by engineering and construction.
The increase in demand for temporary staff accelerated from January’s 10-month low and was described as “sharp”, though still below the trend seen during 2021. IT and computing reported the quickest uplift in temp vacancies, while demand for executive and professional staff was the weakest.
Mr Burnside added: “The Scottish labour market recorded a further strong uplift in hiring activity in February, as a further near-record rise in permanent staff appointments occurred alongside a sharp pick-up in temp billings.
“At the same time, candidate availability continued to decrease rapidly for both permanent and temp staff, albeit at softer rates than in January, while vacancy growth accelerated. Strong demand for scarce candidates subsequently led to further upwards pressures on pay."
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