Scottish employment rates continue to rise

Another set of strong quarterly labour market figures from the Office of National Statistics have shown Scotland outpacing London to record the highest growth in employment rate in the UK since April 2017.

The new figures released today are the latest in a series of positive 3-monthly data sets that show Scotland and the UK continuing to defy softening economic data and continuing political uncertainty around the future of the UK and Europe.

Scotland now has 2.67 million people in work, a rate of 75.8 per cent, a healthy 1.2 per cent rise on the previous quarter and above the UK rate of 75.1 per cent, with 35,000 more people in employment north of the border than the previous quarter.

Unemployment, meanwhile, at 106,000 was down 0.2 per cent at 3.8 per cent of the Scottish population over 16.

This is significantly under the 5-6 per cent unemployment rate seen by many economists as “normal” for developed economies.

The UK jobless figure of 4.3 per cent, meanwhile, is the lowest since 1975.

Noting that the jobs growth figure for Scotland was “unusually large” and “higher than suggested by the general pattern for Scotland”, the ONS said that the figure takes the country to a record high for both its employment level and employment rate.

In Scotland 113,000 people were unemployed with unemployment rates at 4.1 per cent over the last quarter, below the UK rate of 4.3 per cent.

Scotland also recorded the largest UK decrease in economic inactivity over the previous period with a 1.6 per cent drop, bringing the rate in line with the average inactivity rate in the UK.

Over the year youth unemployment in Scotland decreased by 1.6 percentage points to 10.6 per cent, lower than the UK at 13.3 per cent.

And over the quarter, Scotland’s female employment rate increased to 72.0 per cent, higher than the UK rate of 70.7 per cent

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “Despite the well-recorded problems of our oil and gas sector, Scotland continues to set the pace for jobs growth and diminishing unemployment in the UK, and clearly that is a strong positive amid economic uncertainty. Long may it continue.

“But we cannot be complacent about the UK or Scottish economy while real wage growth, stuck at 2.1 per cent, continues to lag inflation. Data released earlier this week showed prices rising at a rate of 2.9 per cent, a four year high. The Bank of England predicts rising wage growth next year, but until that materialises and workers are more confident of their spending power, these positive employment figures will not produce the feel-good factor required to promote further growth.

“The figures also suggest some cautionary signs which require further investigation in certain industries. For example, Scotland recorded a decrease in the number of jobs in Professional, Scientific & Technical activities, both on the quarter and in the same period in the previous year.

“In the meantime, the weakness in real wage growth suggests that interest rates should stay on hold, despite the pick-up in inflation, and given the continuing failure to boost productivity, business has a right to expect measures in the Autumn Budget to help address continued growth-limiting skills shortages and cut the costs of doing business in the UK.

“Scottish business remain anxious for reassurance on a post Brexit immigration system that reflects the needs of the UK economy, and also measures that facilitate the necessary upskilling and training of unemployed or underemployed Scottish and UK workers for a future with less available EU migrant labour.”

Minster for Employability and Training Jamie Hepburn, said: “These latest employment figures are encouraging and are among the highest on record with 2,655,000 people in work in Scotland.

“Scotland has higher employment rates and lower unemployment rates than the UK with 91,000 more people in employment compared to the pre-recession peak. Youth unemployment rates continue to outperform the UK. This comes on top of us fulfilling our commitment to reduce youth unemployment by 40%, four years ahead of schedule.

“While these figures are positive we recognise there are still many barriers to getting people into work and are continuing to work to improve labour market conditions.

“We are expanding the range of opportunities available to young people through our Apprenticeship programme and recently announced £96 million of investment to deliver fairer employment support services through the new Fair Start Scotland programme.

“Today’s figures show the Scottish economy continues to perform well against a difficult backdrop with the lack of clarity from the UK Government on Brexit and proposals to leave the world’s biggest single market posing the single biggest threat to our economy.”