In a surprising twist within the UK's economic narrative, Scotland stands out as a beacon of employment growth despite the broader trend of business deceleration across the nation.
Last month, Scotland topped the charts among the UK's 12 nations and regions in employment growth. This uptick is particularly notable against the backdrop of a consistent decline in advertised vacancies across the UK, which witnessed a drop to 957,000 – marking the 16th consecutive fall.
The juxtaposition of Scotland’s robust job figures against its shrinking private sector economy, which recorded its steepest contraction since last November, underscores the complex economic landscape.
Across the UK, the total number of payrolled employees has increased to 30.2 million, a rise of 398,000 over the year and 1.19 million more than pre-pandemic levels. Scotland's annual growth in payrolled employees stands at 0.9%, with an unemployment rate of 3.9%, lower than the UK's average of 4.2%.
However, Scottish businesses are not immune to the challenges plaguing others in the UK. Labour shortages and recruitment hurdles continue to be significant issues. As of September, 33% of businesses reported worker shortages, and 34% faced recruitment difficulties.
This shortage is felt most acutely in accommodation and food services (48%) and construction (44%). These challenges have led to increased working hours for existing employees and an inability to meet business demands (41%).
The job market sees a divergent trend with a rising demand for permanent nursing and medical care workers in Scotland, contrasted by a decline in secretarial and clerical roles. In the construction and support services sectors, recruitment difficulties are predominantly due to low application numbers and a lack of qualified applicants.
Another contributing factor to these recruitment challenges is the high rate of long-term sickness, with a recent IPPR study highlighting its $43 billion annual cost to the economy. This underscores the urgent need for governments to enhance occupational health provision.
Additionally the rise in company insolvencies, up 18% year-over-year, echoes the strain of rising interest rates and the cost-of-living crisis on consumer spending. This situation raises concerns that without a significant uptick in revenue during the Christmas period, these insolvency figures could worsen in the new year.
John Walls is head of data analysis at s1jobs.
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