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Shoots of optimism despite job market challenges

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Scotland also witnessed a year-on-year increase in the number of payrolled employees across almost all age groups, with the 18 to 24 and 50 to 64 age brackets being the exceptions. Notably, the greatest percentage growth in employment was observed in the over-65 demographic, which saw a 7% increase compared to overall growth of 1.1%.

The Herald:

The energy sector emerged as a standout, recording the highest percentage increase in payrolled employees up to January 2024. The arts, recreation, and finance sectors also saw healthy growth, with only six sectors reporting declines over the same period.

It’s therefore unsurprising that Scottish businesses are relatively optimistic about the next six months, expecting positive trends in business volume, new business activity, turnover, and employment. To underpin and drive the economy, Scottish firms believe the government’s top three priorities should be delivering long-term economic growth (72%), tackling labour and skills shortages (45%), and reducing UK business taxes (43%).

But challenges persisted in the recruitment sector, with a noticeable downturn in permanent staff appointments for the fourth consecutive month. This trend was particularly pronounced in the hotel and catering sector, which experienced the sharpest fall.

The Herald:

A further reduction in the number of permanent job vacancies also compounded the economic landscape, marking the eighth consecutive month of decline by March 2024. Despite a slight easing, the rate of decrease in Scotland was still sharp and more severe than the UK-wide average.

Across the UK, the number of vacancies decreased by 26,000 in the quarter, reaching 898,000 to mark the 22nd consecutive period of decline. Although the numbers remain above pre-pandemic levels, these lower figure mean more job seekers are competing for the same positions.

While Scotland’s unemployment rate is down slightly to 4.4%, it remains slightly above the UK rate of 4.3%. The top sectors for employment in Scotland remain the health and social work sector (15%), along with wholesale and retail and education, each accounting for 13% of the workforce.

The Herald:

The Scottish Consumer Sentiment Indicator shed 1.1 points to remain in negative territory at -6.2, suggesting a weakening in consumer confidence. This decline was largely due to deteriorations across four of the five sub-indicators of sentiment, which include expectations of economic performance, household finances, and spending attitudes. However, this must be set in the context of a steady improvement in the consumer sentiment index since the fourth quarter of 2022.

The only positive indicator is expected economic performance with a score of 8.1, while the attitude to family spending remains the most negative indicator at -21.1. Sentiment regarding the current security of households’ financial position stands at -11.5 for the first quarter of 2024, implying that consumers consider their current household financial security to be worse than 12 months ago.

Although there was a slight weakening in sentiment, decreasing by 0.9 points compared to the previous quarter, this indicator is 11 points higher than in the first three months of 2023, showing a distinct improvement in sentiment regarding financial security over the past year.

John Walls is head of data analysis at s1jobs.

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