The Scottish Chambers of Commerce have welcomed another set of strong quarterly labour market figures from the ONS, which show Scotland outpacing London to record the highest growth in employment rate in the UK since April 2017. The UK jobless figure of 4.3% is the lowest since 1975.
The new figures are the latest in a series of positive 3-monthly data sets that show Scotland and the UK continuing to defy softening economic data and continuing political uncertainty around the future of the UK and Europe. Scotland now has 2.67m people in work, a rate of 75.8% (a healthy 1.1% rise on the previous quarter), while unemployment at 106,000 was down 0.2% at 3.8% of the Scottish population over 16. This is significantly under the 5-6% unemployment rate seen by many economists as “normal” for developed economies.
Noting that the jobs growth figure for Scotland was “unusually large” and “higher than suggested by the general pattern for Scotland”, the ONS said that the figure takes the country to a record high for both its employment level and employment rate.
Scotland also recorded the largest UK decrease in economic inactivity over the previous period with a 1.6 % drop, bringing the rate in line with the average inactivity rate in the UK.
Liz Cameron, chief executive of the Scottish Chambers of Commerce said:
“Despite the well-recorded problems of our oil and gas sector, Scotland continues to set the pace for jobs growth and diminishing unemployment in the UK, and clearly that is a strong positive amid economic uncertainty. Long may it continue.
But we cannot be complacent about the UK or Scottish economy while real wage growth, stuck at 2.1%, continues to lag inflation. Data released earlier this week showed prices rising at a rate of 2.9%, a four year high. The Bank of England predicts rising wage growth next year, but until that materialises and workers are more confident of their spending power, these positive employment figures will not produce the feel-good factor required to promote further growth.
The figures also suggest some cautionary signs which require further investigation in certain industries. For example, Scotland recorded a decrease in the number of jobs in Professional, Scientific & Technical activities, both on the quarter and in the same period in the previous year.
In the meantime, the weakness in real wage growth suggests that interest rates should stay on hold, despite the pick-up in inflation, and given the continuing failure to boost productivity, business has a right to expect measures in the Autumn Budget to help address continued growth-limiting skills shortages and cut the costs of doing business in the UK.
Scottish business remain anxious for reassurance on a post Brexit immigration system that reflects the needs of the UK economy, and also measures that facilitate the necessary upskilling and training of unemployed or underemployed Scottish and UK workers for a future with less available EU migrant labour.”