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Hiring activity down with labour market recovery ‘likely to take more time’

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Hiring activity in Scotland was down last month, with “any meaningful recovery” for the labour market “likely to take more time”.

The Royal Bank of Scotland Report on Jobs for July described conditions as remaining challenging, with permanent appointments and temporary billings falling at the slowest rates since February and January.

Recruiters also suggested a back-to-back monthly increase in the supply of permanent staff during July, with the rate of expansion remaining among the quickest on record, despite slowing from June.

There was further downward pressure on pay, with a fourth successive monthly fall in permanent salaries.

Recruitment consultancies also reported a reduction in average hourly wage rates for short-term staff.

Sebastian Burnside, RBS chief economist, said: “Latest survey data continue to highlight the immensely challenging conditions encompassing the Scottish labour market at present.

“Permanent appointments and temporary billings declined further, with the reductions remaining substantial despite easing.

“Although there were frequent mentions that looser restrictions around the Covid-19 pandemic had allowed businesses to reopen, substantial uncertainty and excess capacity is stifling firms’ appetite to take on additional staff.

“Where they do, feisty competition among candidates for roles is driving pay down further, as both permanent salaries and short-term wages declined markedly again.

“Overall, data is moving in the right direction, with signs that the labour market is edging towards stabilisation, but it is likely that it will take more time before any meaningful recovery takes place.”