Pay levels fall for first time in five months

City Editor

Monday 16 July 2012

PAY levels in Scotland fell for the first time in five months while job creation was at its weakest since the beginning of the year, according to the latest Bank of Scotland Report on Jobs.

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TIM SHARP CITY EDITOR

The Bank of Scotland Labour Market Barometer – a composite indicator of labour market conditions – registered 52.3 in June, which is a five-month low and shows that job market conditions improved only marginally.

Donald MacRae, chief economist at Bank of Scotland, said: "The Report on Jobs for June showed vacancies continuing to rise and an increase in the numbers of people appointed to permanent jobs.

"However the rate of growth slowed showing a weakening in labour market conditions. "The Scottish economy is struggling to maintain growth momentum in the face of the global slowdown."There was an increase in permanent placements, marking sixth consecutive months of rises, but the expansion was the weakest since January.It was still a rosier picture than that for the United Kingdom as a whole, where permanent placements fell during June. The decline was the first in 2012 so far and the fastest for almost three years.Things were worse for temporary workers in Scotland with recruitment agencies reporting a fall in staff billings since May, which is the first decrease in 2012 and in line with the rest of the UK.Meanwhile, permanent salaries fell for the first time in five months, with the rate of decline the strongest since September 2010.Wage rates for temporary workers were fractionally down on May.The information, technology and computing sector continues to recruit, one of just five sectors where demand for permanent staff increased last month.The industry has been the strongest recruiter every month since September 2010 but even it posted the weakest increase in placements in 2012 so far.At the other end of the spectrum there was a steep drop in blue-collar placements, where the rate of decline was the sharpest since October 2010.Demand for permanent staff also declined in the executive and professional and nursing and care sectors.Some 10% of Bank of Scotland panellists reported a reduction in permanent salaries against the previous month while only 5% saw an increase.This contrasts with the UK as a whole where pay rates rose slightly.

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Pay levels fall for first time in five months

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