SCOTLAND’S labour market remained strong in October, with recruitment agencies signalling sharp growth in permanent placements and in billings for temporary staff, a survey shows.

Staff availability meanwhile worsened, fuelling further marked increases in pay, according to the survey published today by Royal Bank of Scotland.

The survey shows that starting salary inflation increased to a 46-month high last month, and was greater than that in the UK as a whole for the first time since July, against the backdrop of growing demand for staff and the worsening supply of candidates.

The survey shows permanent labour supply in Scotland fell substantially and at a quicker pace than in the UK as whole. Short-term staff availability north of the Border also decreased.

Royal Bank noted that, although the pace of increase of permanent staff appointments in Scotland was the weakest since April, it remained sharp overall and was “notably faster than the UK average”. Billings received by Scottish recruiters from the employment of temporary staff increased at the joint-sharpest pace since May, on a par with August.

Royal Bank chief economist Sebastian Burnside said: “Latest survey data continues to signal strong labour market conditions in Scotland. Although permanent appointments rose at a slower rate, the increase was marked and faster than the UK average, while the rise in short-term staff billings quickened.

“With sharp growth in demand for staff and deteriorating candidate supplies being sustained, pay pressures continued to lift. Efforts to attract new joiners was evidenced by starting salary inflation accelerating to a near-four-year high.”