The Scottish labour market saw a further drop in hiring activity during May. Lingering economic uncertainty continued to discourage both workers and firms alike.

Demand for staff weakened, with growth in permanent vacancies slipping to a 27-month low, and temp vacancies falling for the fifth straight month.

Pay pressures showed signs of easing in May.

Permanent candidate availability across Scotland continued to worsen in May, the twenty-eighth consecutive month that a fall has been recorded.

Salary inflation continues but at its softest in 27 months.

IT & Computing registered the strongest increase in permanent vacancies leading a general rise in demand for permanent staff in Scotland.

Strong decrease in temp vacancies

Sebastian Burnside Chief Economist at the Royal Bank of Scotland commented: “The latest survey data indicate that labour market conditions across Scotland continued to cool as economic uncertainty weighed on hiring activity and limited worker movement. At the same time, growth of demand for permanent workers weakened, while temp vacancies dropped further. In terms of pay, starting salaries and hourly wages rose as firms increased their pay offers to secure high calibre workers. However, in line with the weaker demand trends, latest data signalled an easing of overall pay pressures, with both starting salary and hourly wage inflation moderating in May.

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