Scottish wage rates driven by demand

20-11-2006

Scottish wage rates driven by demand
Permanent pay rates in Scotland reached a high last month, helped by a firm demand for staff and growing employment levels for both permanent and temporary workers, according to new figures.

Wages for permanent staff were higher than the UK average in October, according to the Bank of Scotland's latest labour market report, with almost 29 per cent of recruitment consultants reporting a rise in pay levels over the month.

Pay rates for temporary and contract staff also increased over the period, fuelled partly by the recent rise in the minimum wage, according to the survey.

The Bank of Scotland report found that demand for staff remained firm during October, while permanent and temporary levels of employment continued to grow, albeit at their lowest level for nine months as a result of reported skills shortages.

Although the index slipped to 59.3 last month, it remained above the 50 point level, which represents no change and above the 58.8 level recorded on the barometer measuring employment rates across the UK as a whole.

Despite slowing rates of employment, the number of people employed in permanent jobs across Scotland still rose for the 17th consecutive month in October.

Demand for both permanent and temporary staff was highest within the engineering and construction sector, followed by IT and computing.

Meanwhile, Glasgow recruitment consultancies reported the strongest rises in both permanent and temporary placements last month, while permanent staff shortages were highest in Edinburgh and temporary staff shortages at their greatest in Aberdeen.

Commenting on the results, Bank of Scotland group economist, Tim Crawford, said: "The Scottish labour market continues to grow at a stronger rate than the UK average but Scottish growth rates are down a little from those seen earlier in the year.

"One of the factors behind this has been that employers are finding it more difficult to attract the right candidate.

"Pay rates have risen firmly in this environment, both for permanent and temporary staff," he added.


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