DEMAND for staff in Scotland has grown again but the availability of candidates to fill vacancies has fallen sharply, according to the latest Bank of Scotland report.
The bank's Labour Market Barometer showed the number of people placed in work rose again in May, although the rate was below the levels seen in the opening quarter of this year, and throughout 2014.
Pay also improved, with rises in both permanent starting salaries and temporary hourly rates.
The barometer registered above the 50.0 “no-change” mark in May, at 59.6, slightly higher than April’s 22-month low of 59.1.
The UK as a whole registered a comparatively greater improvement at 62.0, continuing the year’s trend.
Donald MacRae, Bank of Scotland’s chief economist, said: “May’s barometer was a healthy 59.6 – slightly up from last month.
“The number of people placed into work rose, accompanied by an increase in both permanent and temporary vacancies.
“The rate of increase in permanent starting salaries was strong while hourly pay rates for temporary staff increased for the second month in a row.
“These results show the Scottish economy recovering some of the growth momentum lost in January this year.”
Growth in permanent appointments north of the Border improved slightly from April and was below the average recorded over the upturn that started in early 2013.
The rise in Scotland was again less marked than the UK average.
The Bank of Scotland report said there was a stronger trend in billings from temporary staff, which increased at the fastest rate in six months, though it was still below the average for the UK as a whole.
One factor that stopped consultancies placing more people into work was a further fall in the availability of candidates.
May’s deterioration in permanent candidate supply was the “most marked since January”, while the fall in temporary candidates was the second-fastest in the past eight months.
On both fronts, the decline in availability was sharper than at the UK level.
Consultancies in Scotland reported that demand for staff continued to rise. The IT and computing sectors reported strong demand in particular, and while the rate of demand for permanent employees was the least marked since July 2013, it was still strong.
Temporary job openings increased at a solid rate that was unchanged from April.
Permanent salaries increased and at a rate just below those seen in the prior two months, while growth of hourly pay rates for temporary staff accelerated to the fastest since March 2014, passing the national average.
As in the previous month, all monitored regions except Aberdeen recorded rises in both permanent and temporary placements, with Dundee seeing the fastest growth on both fronts.
Dundee was also joint-fastest with Edinburgh in temporary appointments.
Glasgow and Edinburgh recorded the steepest declines in permanent and temporary candidate availability respectively, while Aberdeen was the only region where supply of candidates rose.
The most marked increase in permanent starting salaries was recorded in Edinburgh, which also registered the second-fastest rise in temp pay, behind Dundee.
The rate of increase in permanent starting salaries was slightly slower than in the previous two months, but strong nevertheless, said BoS.
Hourly pay rates for temporary staff increased for the second month running, and to the greatest extent since March 2014.
May saw another modest rise in the number of people placed in permanent jobs, with the rate of growth picking up only slightly from April’s 26-month low.
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