Publication - Progress report

State of the economy: October 2018

Published: 23 Oct 2018
Chief Economist Directorate
Part of:

Report produced tri-annually by the Chief Economic Adviser to provide a picture of the Scottish economy in an international context.

State of the economy: October 2018
Labour Market

Labour Market

Scotland’s labour market has continued to perform strongly through the first half of 2018.

Latest data for June – August 2018 show the unemployment rate at 3.9%, the employment rate at 74.9% and the inactivity rate at 22.0%.

Scotland Labour Market Statistics (June - August 2018)

Rates Latest (%) Quarterly Change (% p.t.) Annual Change (% p.t.)
Employment* 74.9 -0.5 -0.3
Unemployment** 3.9 -0.5 -0.2
Economic Inactivity* 22.0 0.9 0.5
Levels ('000) Latest Quarterly Change Annual Change
Employment (16+) 2,635 -11 -20
Unemployment (16 - 64) 106 -14 -7
Economic Inactivity (16 - 64) 749 30 14

*Denominator = Working age population (16-64)
**Denominator = Total economically active

The unemployment rate in Scotland has fallen over the past year to slightly below the UK rate (4.0%) and remains close to its record low rate of 3.8% in 2017.

There has been a fall in the number of people employed in Scotland and a rise in the number of people inactive over the past year, however the employment rate remains close to its record rate of 75.8% in 2017.

The fall in employment over the year has been in full-time jobs which have fallen by 46,000, while this has been partially offset by a 25,000 rise in part-time employment.

Tightness in the labour market at the aggregate level remains evident in business surveys which continue to signal that recruitment conditions remain challenging for firms. Stronger declines in the number of permanent and temporary staff available in the face of rising job vacancies was accompanied by an increase in temp wages and starting salaries in September 2018[4].

Alongside this, regular earnings growth has strengthened in 2018. In Great Britain as a whole, nominal average weekly regular pay grew by 3.1% over the year to June to August – its highest rate since 2009. This has fed through to a slight pick-up in real average weekly regular pay growth to 0.7%.


Email: Office of the Chief Economic Adviser