Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented:
“The Scottish labour market continued to exhibit weakness which has now existed for the most part of the last one-and-a-half years. Latest survey data highlighted that uncertainty regarding the outlook and firms looking to cut expenses impeded hiring activity. Additionally, demand for both permanent and short-term workers worsened for the eighth successive month, with recruiters recording fewer jobs available across Scotland. “Meanwhile, though scarcity of suitably-skilled labour drove a further increase in permanent starting salaries during March, worsening hiring conditions meant pressures on pay eased.

Sustained downturn in permanent placements
Scottish recruiters recorded a fourth consecutive monthly fall in permanent staff appointments during  March. Permanent placements also fell at the UK level, although at a softer pace than that seen in Scotland.

Fresh rise in temp billings
Temp billings rose across Scotland during March. The rate of expansion was modest though and weaker than the average recorded over the series history. Meanwhile, the downturn in temp billings across the UK as a  whole continued into March and was the most pronounced since July 2020.

Sharp, albeit weaker decline in permanent staff supply
March data revealed a fall in permanent candidate availability in Scotland, extending the current run of  decrease to 38 months. In contrast, the supply of permanent staff expanded across the UK as a whole, the
rate of growth ticking up to a four-month high.

Growth in short-term staff supply moderates further
A sixth successive monthly rise in temp candidate availability was recorded across Scotland during March. The rate of growth softened to a five-month low and was modest overall, however. The rate of growth across the UK as a whole strengthened and outpaced that recorded for Scotland.

Starting salary growth moderates to 37-month low
Average starting salaries for permanent new joiners rose across Scotland in March. Labour shortages and increased bids to secure suitably-skilled candidates exerted upward pressure on pay, noted panellists. That said, the rate of inflation moderated notably to the weakest in just over three years.

Temp wage inflation eases in March
While the rate of growth across Scotland trended above the UK-wide average, the increase was the weakest in six months and historically muted.

Sharp decline in permanent vacancies whilst downturn in temporary vacancies remains.
Demand for permanent staff deteriorated across all the eight monitored sectors. In line with the trend for permanent roles, temporary job vacancies in Scotland fell in March, thereby extending the current run of
contraction to eight months. Executive & Professional recorded the fastest drop in demand for short-term staff across the monitored sectors in March.

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