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S&P Global Reports Downturn in Permanent Placements Softens in May

  • Slowest drop in permanent placements for four months
  • Temp vacancies fall for the fifth month running
  • Starting salary inflation eases to 27-month low

The Scottish labour market saw a further drop in hiring activity during May, according to the latest RBS Report on Jobs survey. Lingering economic uncertainty
continued to discourage both workers and firms alike. That said, the latest survey signalled a softer downturn in permanent placements as some recruiters were able
to fill long-standing vacancies and organise hires for new projects. However, temp billings fell at a sharper pace. Moreover, demand trends weakened, with growth in permanent vacancies slipping to a 27-month low, and temp vacancies falling for the fifth straight month. As a result, pay pressures showed signs of easing in May.

Sebastian Burnside, Chief Economist at 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.

“However, it’s also worth noting that the downturn in permanent placements eased notably on the month. There were some reports of successful recruitment which helped soften the pace of decline, providing some encouragement. Whether this relative improvement is short-lived, or an indication of future growth, is hard to gauge, but greater confidence in the market will be required to support a sustained recovery.”

The Royal Bank of Scotland Report on Jobs is compiled by S&P Global from responses to questionnaires sent to a panel of around 100 Scottish recruitment and employment consultancies.

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