The number of payrolled employees continued to rise in December as demand for staff remained strong though staff shortages persist.
Official labour market statistics, payrolled employment and claimant count
- The latest labour market statistics for September to November 2021 in Scotland, show there were 2.67 million people in employment (rate of 75.1%, up 0.7 percentage points over the year), 100,000 people unemployed (rate of 3.6%, down 0.8 percentage points) and 755,000 people economically inactive (rate of 22.1%, down 0.1 percentage points).
- These indicators continue to compare well against historical trends, and reflect the support provided to the labour market during the pandemic by the furlough scheme which finished in September 2021.
- The unemployment rate (3.6%) fell below its pre-pandemic level of December to February 2020 (3.7%) for the first time. Over the same period, the employment rate remained slightly below (75.1%, down from 75.4%) and the inactivity rate remained slightly above (22.1%, up from 21.6%). There are a range of reasons why people are economically inactive (neither in employment or actively seeking and available for work) with the highest proportions being long-term sick, students, looking after family/home and retired.
- Wider labour market indicators show the labour market continued to strengthen in December. Pay As You Earn (PAYE) Real Time Information estimates indicate the number of payrolled employees in Scotland continued to increase in December, up 23,000 (1%) over the month and 44,000 (1.9%) more than in September at the end of the furlough scheme. Overall in December, there were 2.42 million payrolled people in employement, 22,000 more than the pre-pandemic level in February 2020.
- Alongside the rise in payrolled employees, 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) fell 2.1% in December to 145,400; a claimant count rate of 4.6%.
- The claimant count continued its recent downward trend and has fallen 34.2% from its peak in August 2020 and 8.7% since September when the furlough scheme ended. However, the claimant count remains 31,700 (27.9%) higher than its pre-pandemic level in February 2020.
Demand for staff
- The latest Report on Jobs signalled that demand for both permanent and temporary staff remained elevated in December, though the pace of growth continued to ease over the month, while candidate availability (labour supply) continued to fall at similar rates across permanent and temporary candidates. More recent online vacancies data signal that strong demand for staff continued into January. Latest figures for the week to 14 January, show online job vacancies were 21.6% higher than in February 2020.
- The combination of low unemployment, the recent rapid strengthening in demand for staff and sharp decline in candidate availability has resulted in further upward pressure on starting salaries, particularly for permanent roles and ongoing labour shortages affecting a range of sectors.
- Latest BICS data indicates that accommodation and food, construction, arts, entertainment and recreation and transport and storage remain the sectors with the highest shares of businesses reporting a shortage of workers.
- Furthermore, in December, 43% of businesses found vacancies were more difficult to fill than normal (marginally down from 44% in November), while the number of businesses reporting no difference and that vacancies were easier to fill remained broadly steady at 24% and 2% respectively.
- 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.,
- Following a slight fall in September, latest PAYE RTI data show mean monthly pay grew by 1% in October (3.9% annually) and 1.1% in November (5% annually) to £2,554.
- However, the CPI annual inflation rate was 4.1% in October and 5.1% in November, reflecting that the current rise in inflation is weighing notably on real earnings growth.
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