Scottish Labour Market 'Improving'

Demand for staff remained strong last month but there was an acute lack of available candidates to fill the posts, according to the latest report on the state of the job market.

The Bank of Scotland report found that the availability of candidates for permanent roles fell sharply in April, with the rate of decline only slightly slower than March's survey record. Candidate numbers for temporary posts also decreased "markedly''.

At the same time, April also saw permanent starting salaries rise "sharply'', and at a faster rate than in the previous month. Temporary hourly pay rates also went up.

The bank's labour market barometer measures areas such as levels of staff demand, employment and wages in permanent and temporary jobs to create a single figure snapshot of job market conditions.

At 62.5 last month, it remained close to its highest level in the survey's history and was indicative of a "substantial improvement in the health of Scotland's labour market''.

But it was down slightly from the 63.9 recorded in March and was lower than its UK equivalent, of 64.3, for the first time in 14 months.

The figure is measured against a baseline of 50. Anything above 50 represents an improvement in market conditions and below is a deterioration.

Overall, April's rise in permanent staff appointments was the slowest since May last year, the barometer found, with the rate of growth having eased for the second successive month.

Recruitment consultancies recorded another strong increase in the demand for permanent staff, albeit one that was the weakest so far this year.

Growth in the demand for temporary staff was unchanged from the marked pace recorded in the month before, the study found.

Regional results show that permanent appointments rose the fastest in Glasgow, with only Aberdeen recording a reduction in placements. Glasgow also led broad-based increases in both permanent starting salaries and hourly rates of pay for temporary staff.

Donald MacRae, chief economist at Bank of Scotland, commented: "The Scottish labour market continued to improve in April. Demand for staff was strong but accompanied by a lack of available candidates. As a result the number of people appointed to permanent jobs rose but at a slower rate than in recent months.

"Salary inflation picked up in the month, partially reflecting demand for staff. The economic recovery continued into the second quarter of 2014.''

Finance Secretary John Swinney welcomed the figures, which he said signalled a continued improvement in Scottish labour market conditions.

He said: "They follow on from this week's labour market figures which show that employment levels are at their highest since records began, with 2,585,000 people now employed in Scotland. Latest Gross Domestic Product (GDP) statistics report that the Scottish economy increased by 1.6% during 2013, the fastest annual growth since 2007.

"The recovery in Scotland's economy is continuing to make headway, but there is no room for complacency. That is why we are also continuing to invest, through our schools, colleges and universities, to ensure people of all ages have the skills our economy requires.''