Monthly economic brief: February 2022

The monthly economic brief provides a summary of latest key economic statistics, forecasts and analysis on the Scottish economy.

This document is part of a collection

Labour Market

Unemployment remained low in the final quarter of the year while vacancy rates and staff shortages persist.

Official labour market statistics, payrolled employment and claimant count

  • The latest labour market statistics for October to December 2021 in Scotland show there were 2.65 million people in employment (rate of 74.1%, up 0.8 percentage points over the year), 112,000 people unemployed (rate of 4.1%, down 0.5 percentage points) and 773,000 people economically inactive (rate of 22.6%, down 0.5 percentage points).[9]
Scotland Labour Market
the unemployment, employment and inactivity rate in Scotland up to October– December 2021
  • Wider labour market indicators showed signs of further strengthening in the labour market in January. Pay As You Earn (PAYE) Real Time Information estimates for January 2022 indicate the number of payrolled employees in Scotland remained broadly stable over the month at 2.4 million, however was 30,938 (1.3%) more than in September at the end of the furlough scheme. Furthermore, there were 14,000 more payrolled employees than the pre-pandemic level in February 2020.[10]
Payrolled employees and Claimant Count in Scotland
the number of payrolled employees and the claimant count between 2018 and 2022
  • Scotland's Claimant Count (the number of claimants of Job Seekers Allowance and claimants of Universal Credit claiming principally for the reason of being unemployed) also continued its downward trend in January, down 2.5% over the month to 140,500; a claimant count rate of 4.4%.
  • Overall, the claimant count has fallen 36.4% from its peak in August 2020 and 11.7% since September when the furlough scheme ended. However, it remains 26,800 (24.4%) higher than its pre-pandemic level in February 2020.[11]
  • Further underlying changes continue to emerge in the labour market as it recovers from the pandemic. While employee numbers have risen above their pre-pandemic level, the overall level of employment remains below, reflecting that the number of self-employed has fallen.[12]
Employment type in Scotland
total in employment and the employee / self –employed levels up to October – December 2021
  • One of the main impacts of the furlough scheme was that people worked fewer hours, even though they remained in employment. After falling heavily at the start of the pandemic, average actual weekly hours of work have now returned to around pre-pandemic levels. In October to December 2021, average total weekly hours was 31.6, up from 29.2 hours during the same period in 2020 and up from 30.7 hours during the same period prior to the pandemic in 2019.[13]
Scotland's Average Actual Weekly Hours of Work – All Workers
the average amount of weekly hours worked in Scotland up to Oct – Dec 2021

Demand for staff

  • Business surveys have also signalled that labour market tightness has persisted into the start of 2022 with strong demand for staff while recruitment challenges continue.
  • The latest Report on Jobs signalled that overall demand for staff continued to grow in January (69.6), and remains high compared to historical standards. However, the rate of growth eased over the month, continuing its downward trend from over the second half of 2021, with demand for permanent staff stronger than for temporary staff.[14]
  • Supply side challenges in the labour market have also continued with candidate availability (labour supply) continuing to fall for a twelfth month, however the rate of fall was at its weakest rate since May 2021.
Report on Jobs: Supply and Demand for Staff in Scotland
vacancies, staff availability and starting salaries in Scotland (Jan 2020 – Jan 2022)
  • More recent online vacancies data signal that strong demand for staff continued into February, with online job vacancies 44.2% higher than in February 2020.[15]
  • The strength in demand for staff, coupled with low unemployment and falls in candidate availability has meant upward pressure on starting salaries has remained elevated at the start of the year, particularly for permanent roles.
  • Labour shortages also continue to affect a range of sectors with 34% off businesses experiencing a shortage of workers into the start of February. This is down from 38% in October, however remains most notable in transport and storage (42%), construction (40%), accommodation and food services (38%) and manufacturing (32%).[16]
Share of businesses experiencing a shortage of workers (data to 6 Feb)
businesses experiencing worker shortages by sector
  • Reflecting this, 38% of businesses in January, reported their ability to fill vacancies remains more difficult than normal for the time of year, down from 47% in October, while the share of businesses reporting no difference in their ability to fill vacancies increased to 27% (up from with 22% in October).[17]
Business ability to fill vacancies in the last month compared with normal expectations (data to 23 January)
business ability to fill vacancies between Jul 2021 and Jan 2022


  • Mean PAYE monthly pay fell sharply at the start of the pandemic, however strengthened over the course of 2020 and rebounded back above its pre-pandemic level in August 2020.[18],[19]
Scotland PAYE Monthly Earnings Annual Growth
nominal and real mean monthly earnings in Scotland between 2016 and 2021
  • Latest data show mean monthly pay grew by 0.7% over the month in December (UK: 1.3%), and grew 5.2% annually (UK: 5.6%) to £2,558 (UK: £2,805).
  • However, the CPI annual inflation rate was 5.4% in December, and is weighing notably on real earnings growth.



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