Scotland’s job market continued to improve in September, with an increase in appointments and a rising number of vacancies.
The latest labour market survey from Bank of Scotland out today showed an increase in both permanent and temporary jobs filled, with the rates of growth at four- and five- month highs respectively.
The bank’s chief economist, Donald MacRae, said a significant fall in unemployment should follow once consumers start spending again and businesses feel encouraged to invest.
He said: “The Scottish economy is maintaining employment in the face of the global slowdown. A significant fall in unemployment awaits a lift in both consumer and business confidence.”
For now the pick-up remains modest. The Bank of Scotland Labour Market Barometer – a composite indicator designed to provide a single figure snapshot of labour market conditions – posted 52.3 in September, down marginally from 52.4 in August. However, that is still above the 50 mark that signals growth in Scotland’s job market.
Scottish recruitment agencies largely linked higher staff placements to greater client demand, adding that candidate availability fell further over the month.
For the third time in four months, average permanent salaries fell during September, but the latest reduction was only marginal. Temp hourly pay rates, meanwhile, rose for the third month running, and at the strongest rate since August 2011.
The improvement in the labour market comes despite Britain’s economy being stuck in the doldrums, having endured three consecutive quarters of falling output.
However, many economists believe the country has now turned a corner and that official figures due out next week will show that the economy bounced back in the three months to September.
Another report officially published today by the Ernst & Young Item Club says rising employment is driving a resurgence in consumer demand that will boost the housing market next year, and help the UK economy return to decent growth in 2014.
The Item Club’s autumn forecast says that “deeply disappointing” trade figures have stifled growth over the last six months, but falling inflation and rising employment have seen consumer demand bounce back stronger than expected. It says these trends will continue to gather pace next year, supported by improvements in the housing market.
The report forecasts GDP to fall 0.2 per cent overall this year, before increasing by 1.2 per cent in 2013 and 2.4 per cent in 2014.
Peter Spencer, chief economic adviser to the Item Club, said with exports being battered by the eurozone crisis and a weakening global economic outlook, the UK is relying heavily on the high street to come to the rescue this year.
But Spencer added: “The fundamentals are in place to enable this to happen. Inflation is coming back to heel, private sector employment is holding up, and the housing market also looks poised for a revival.”