RBS: Permanent placement growth remains subdued in March

Nonetheless, RBS said temp billings grew sharply, while demand for both types of staff grew at a faster pace than in February.

Meanwhile, candidate availability continued to worsen, with declines in both short-term and permanent labour supplies gathering pace. Consequently, pay pressures intensified during March.

Further growth in permanent staff appointments was signalled by Scottish recruiters during March, extending the current upturn to twenty-sixth months. Latest data revealed a stark contrast to the trend at the UK level, where permanent placements dipped moderately. Nevertheless, growth in Scotland was subdued, holding close to that seen in February.

Meanwhile, temp billings growth in Scotland was sharp, having accelerated from the previous month. Relative to the UK overall, Scotland outperformed, as the expansion  at the national level eased and was only moderate.

Latest survey data pointed to a faster deterioration in permanent labour supply in Scotland. Overall, the decline was steep and among the quickest recorded in the survey’s history. Similarly, permanent candidate availability fell at a faster rate across the UK as a whole in March.

Short-term staff supply in Scotland also worsened during the latest survey period. The decline was sharp and stronger than the long-run average. A dip in temporary candidate availability was also recorded for the UK overall, but the reduction was the softest in two years.   

A renewed acceleration in permanent staff vacancy growth was observed in Scotland during March. The increase was stronger than seen for the UK overall, as has been the case for just over a year. Temporary job openings also increased at a quicker pace in Scotland, and one that was faster than the UK average.

Latest survey data signalled sustained pay pressures during March. Starting salaries awarded to permanent joiners rose markedly, albeit at a rate that was little-changed from February’s near two-year low.

Temp wages in Scotland grew at a faster pace than in February, but was weak relative to the average across the past 12 months. The rate of pay inflation at the UK level dropped to a two-year low, but was broadly similar to that seen in Scotland.

Sebastian Burnside, chief economist at Royal Bank of Scotland, said: “Following the marked slowdown seen in the opening months of 2019 in permanent staff appointments, March data revealed little signs of any recovery to the strong levels seen at the end of last year, with growth remaining subdued overall.

“Nevertheless, relative to the rest of the UK, Scotland continued to outperform, as has been the case for much of the past year. Survey data for the UK as a whole pointed to the quickest fall in permanent staff placements in over two-and-a-half years in March.”