Scotland's labour market saw an improvement in overall hiring activity in September, with recruiters reporting a fresh rise in permanent placements and stronger temporary billings growth.
The seasonally-adjusted Permanent Placements Index rose back above the neutral 50 mark, from 47.3 in August to 52.7 in September.
Panellists responding to the Royal Bank of Scotland Report on Jobs survey attributed the upturn to strong demand for staff and increased hiring activity amongst clients in some sectors.
At the same time, sustained growth of vacancies, combined with another deterioration in candidate availability, led to further upwards pressure on pay. Both starting salaries and temp wages increased at historically sharp rates, despite easing since August.
September data pointed to sustained growth of temp billings across Scotland, extending the current sequence of upturn that began two years ago. The rate of expansion ticked up from August's seven-month low.
The pace of increase in temp billings in Scotland was broadly in line with the trend seen for the UK as a whole.
The supply of permanent staff across Scotland continued to decrease in September, stretching the current sequence of contraction to 20 months. Skills shortages and high demand for staff reportedly drove the latest fall.
Scotland recorded a much sharper fall in permanent staff supply than that seen on average across the UK, with the pace of decline slowing slightly on the month at the national level.
Adjusted for seasonal variation, the Temporary Candidate Availability Index remained below the neutral 50 mark in September, signalling a nineteenth straight monthly deterioration in the supply of temp staff across Scotland. Panellists cited strong demand for short-term workers and a reluctance among candidates to move roles.
September data signalled a sustained uplift in salaries awarded to permanent new joiners in Scotland, amid reports that strong demand for staff led to upwards pressure on pay. Though historically sharp, the rate of salary inflation was the slowest for 15 months, and weaker than that recorded for the UK as a whole.
A twenty second monthly increase in hourly rates for short-term staff in Scotland was recorded in September. According to survey respondents, skills shortages were the primary cause of the latest rise. The rate of temp wage inflation softened to a four-month low, but was nonetheless sharp and outpaced the UK-wide average.
The IT and computing sector recorded the fastest rise in permanent vacancies, followed by nursing, medical and care, while hotel and catering saw the slowest.
Demand for temp staff was strongest in IT and computing, followed by accounting and financial.
Sebastian Burnside, chief economist at RBS, commented: “Permanent staff appointments across Scotland rose during September following a moderate fall in August, amid reports of improved hiring activity at clients in some sectors and strong demand for workers.
"The imbalance between staff demand and supply continued to place upwards pressure on pay in September.
“The latest survey showed that both permanent and temporary staff availability continued to decline sharply, which drove further increases in temp pay and starting salaries at rates seldom seen in the history of the survey.”
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