By Kristy Dorsey

Salaries for new permanent employees in Scotland during July rose by the most in seven years as the demand for staff continued to outpace supply amid the easing of lockdown restrictions.

The number of permanent placements increased for the seventh month in a row while the availability of candidates fell for the sixth month running, according to the latest Report on Jobs produced by the Royal Bank of Scotland. Salaries rose for the eighth consecutive month with the rate of inflation the second-fastest on record, behind July 2014, since the survey began in 2003.

It was a similar story among short-term staff, with the rate of increase in temporary billings up for the 11th month in a row. The supply of temporary staff declined at the second-quickest rate on record, driven by strong demand and fewer candidates as a result of Brexit and the Government’s furlough scheme.

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The number of vacancies across Scotland also continued to rise, with the number of unfilled permanent jobs up for the sixth month running and at a pace only fractionally slower than the record set in June. There was also another rapid rise in temporary vacancies, with the rate of increase matching the record set in June.

“Recruiters again noted challenges in finding candidates, as the supply of both short-term and permanent staff plummeted again amid reports of surging demand,” said Sebastian Burnside, chief economist at the Royal Bank of Scotland. “Indeed, vacancies continued to rise rapidly, with the rates of increase for temporary positions highest on record and permanent staff second only to the rise witnessed in June.

“This mismatch between supply and demand is likely to pose further challenges in the months ahead, but overall, the labour market is in good position, recouping any lost ground at a rapid pace, and hiring activity is showing little signs of any considerable slowdown.”

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The number of permanent placements also rose at the UK level in July, though at a faster pace than that seen in Scotland. The increase in temporary billings for short-term staff in Scotland outstripped the UK average for the third month in a row.

Latest figures released last month by the Office for National Statistics put the unemployment rate in Scotland at 4.4 per cent, with 118,000 people out of work and actively seeking a job. That compares to the UK-wide unemployment rate of 4.8%.