THE Scottish labour market is “full steam ahead” after experiencing “an unprecedented surge in hiring activity” during August, according to a jobs report from the Royal Bank of Scotland.

Openings for both permanent and temporary staff increased at the most marked rates since 2003, when the survey began, amid widespread reports that firms were hiring more people due to the easing of Covid-19 restrictions.

But there was a shortage of candidates for available roles, with industry panellists citing Covid-19, strong demand for workers and Brexit as potential reasons for the decline, the Royal Bank of Scotland Report on Jobs said.

Moreover, August figures show both permanent starters and temporary workers’ salaries increased rapidly, with the rates of inflation the highest seen since the survey began.

A ninth successive monthly increase in salaries awarded to permanent new joiners across Scotland was recorded in August, while temporary wages across the country have increased every month since last December.

The report uses an index to rank changes in the jobs market based on responses of surveyed recruitment consultants, referred to as “panellists”.

Sebastian Burnside, RBS’s chief economist, said: “August data pointed to a notable acceleration in hiring activity across Scotland, as the labour market continued to rebound following the loosening of Covid-19 restrictions.

“Temp billings and permanent placements rose at unprecedented rates, as businesses continued to ramp up their hiring plans.

“Staff shortages were again widely reported by panellists, with the supply of candidates falling rapidly again.

“At the same time, vacancies expanded at the quickest rates ever seen, while pay for both permanent and short-term staff also hit fresh survey peaks.

“This mismatch between demand and supply is likely to pose further challenges in the coming months, but for now, the Scottish labour market is full steam ahead.”

IT and computing recorded the strongest rise in permanent vacancies across the monitored sectors, followed by engineering and construction, the report shows.

In the temporary sector, “blue collar” roles saw the fastest overall increase, followed by hotel and catering.