Permanent Scottish job placements fall at fastest rate since mid-2009

Meanwhile, growth in permanent salaries slowed sharply, falling further behind the UK average.

There was a more positive picture across the temporary jobs market, however, as a strong increase in hourly pay rates supported a return to growth in billings received by consultancies from contract staff.

Continuing a trend seen throughout the final quarter of 2016, Scottish recruitment agencies recorded a drop in permanent placements in December.

Following back-to-back marginal decreases, the rate of decline picked up to the fastest seen since June 2009.

That contrasted with further, albeit slightly slower, growth in permanent placements across the UK as a whole.

Meanwhile, recruiters north of the border noted a rise in billings received from temporary staff for the first time in four months.

One factor that contributed to the resumption of growth in billings was a strong rise in hourly rates of pay for temporary staff.

Temp wage inflation was in fact the fastest since May 2016, matching the trend seen at the UK level.

However, there was a sharp slowdown in growth of permanent salaries, which rose at the weakest rate seen for almost four years.

Recruiters recorded a marked and accelerated drop in the availability of candidates for permanent jobs in December, the sharpest since August.

They also noted a fractional reduction in the availability of candidates for temporary jobs, thereby ending a six-month sequence of improvement.

Growth in demand for staff slows December’s survey signalled ongoing growth in demand for permanent staff among Scottish businesses, although the rate of increase was at a four-month low. Temp vacancies also rose at a slightly slower pace.

By sector, the strongest increases in demand were recorded in Hotel & Catering, Nursing/Medical/Care and Engineering & Construction.

Chief executive of the Recruitment and Employment Confederation, which produced the report for Markit, Kevin Green, said: “The jobs market in Scotland is going through a tough patch, with fewer people securing permanent jobs each month and salary growth slowing down. Scotland’s economy is underperforming relative to the UK, the energy sector has weakened, and the referendum result has brought uncertainty. These factors are all having a significant impact on business confidence.

“Employers are continuing to post vacancies in Scotland, which suggest that demand for staff is strong, but employers are showing hesitancy when it comes to making hiring decisions. It’s possible that the jobs market will pick up again quickly if confidence is shored up. The government can help this by providing clarity on their priorities for the EU negotiations and the likely impact on employers.”