Scottish hiring activity continue to contract substantially in July, although the labour market downturn softening slightly compared to previous months this year, according to the latest RBS Labour Market Report.
The report's seasonally adjusted Permanent Placements Index posted a value of 40.9 last month, substantially below the neutral value of 50.
The figure indicates that the number of permanent staff appointments fell.
However, the drop in appointments was the lowest its been since before the country entered lockdown in March, with the loosening of coronavirus restrictions leading to many businesses reopening and resuming hiring, albeit to lower levels than pre-pandemic.
Scottish recruiters also saw back-to-back increases in supply of permanent staff in July, whilst temp staff supply rates saw their quickest rate of expansion for over 11 years.
Starting salaries for permanent staff feel for the fourth consecutive month, wholst July saw the fifth straight month with reduced demand for staff.
Speaking following the report, Sebastian Burnside, Chief Economist at Royal Bank of Scotland, commented: “Latest survey data continue to highlight the immensely challenging conditions encompassing the Scottish labour market at present. Permanent appointments and temporary billings declined further, with the reductions remaining substantial despite easing.
“Although there were frequent mentions that looser restrictions around the COVID-19 pandemic had allowed businesses to reopen, substantial uncertainty and excess capacity is stifling firms’ appetite to take on additional staff. Where they do, feisty competition among candidates for roles is driving pay down further, as both permanent salaries and short-term wages declined markedly again.
“Overall, data are moving in the right direction, with signs that the labour market is edging towards stabilisation, but it is likely that it will take more time before any meaningful recovery takes place.”
