Downturn hitting Scottish jobs and businesses

Jobcentre sign The number of people placed into permanent jobs rose slightly but starting salaries fell

The downturn is continuing to impact on jobs and business prospects in Scotland, according to the latest data.

The starting salary for new recruits to full time jobs has fallen for the first time in more than a year.

Scotland's labour market improved slightly last month, but latest figures on footfall at Scottish shops show the sharpest decline of any part of the UK.

The Scottish government said it was working to boost consumer and economic confidence.

The Bank of Scotland's monthly report on jobs suggested a rise in permanent and temporary staff placements.

Start Quote

This latest barometer suggests the Scottish economy is struggling to maintain growth momentum”

End Quote Donald MacRae Bank of Scotland chief economist

Recruitment agencies reported only a marginal rise in demand for new staff, while salaries for permanent hires fell for the first time in 13 months.

The bank said the figures suggested the Scottish economy was "struggling to maintain growth momentum".

However, on a more positive note, a survey by the Federation of Small Businesses (FSB) in Scotland suggested more than half of Scotland's small business owners planned to grow their firms in 2012, despite the tough economic climate.

The Bank of Scotland's jobs barometer - which is designed to provide a single figure snapshot of labour market conditions - posted 50.4 in January, up slightly on the previous month.

Measurements of 50 and above represent expansion while numbers below 50 suggest contraction.

Bank of Scotland chief economist Donald MacRae said: "Despite slowing growth in the eurozone and the UK, the number of people placed into permanent jobs increased after December's decline while the number of vacancies for permanent staff was broadly unchanged from the end of last year.

"This latest barometer suggests the Scottish economy is struggling to maintain growth momentum in challenging economic conditions."

'Troubled times'

The decline in footfall at Scottish shops was highlighted in a report from the British Retail Consortium (BRC).

Comparing November to January this winter with the same three months last winter, the BRC said there was a fall of 8.5% in the number of people out shopping in Scotland.

Sales Retailers say they have been facing worrying monthly sales figures

That compares with an increase of 1.8% for the whole of the UK during the same period, at least partly explained by the improved weather conditions compared with December 2010.

Scotland was also one of the worst parts of the UK in the previous three months of footfall survey.

Ian Shearer, of the Scottish Retail Consortium, said: "These results are further evidence of the troubled times for Scottish retail. Even Christmas failed to bring shoppers out in Scotland.

"The drop of 8.5% in footfall for the quarter sadly mirrors the worrying monthly sales figures in our recent Scottish retail sales monitor reports, which have shown the worst declines for over a decade."

He said consumer confidence was weaker in Scotland than the UK, as people worry about personal finances and jobs.

There was better news from the retailers on Scottish shop vacancies. At 9.1% of shops, they were better than the UK average of 11.1%.

Construction sector

Meanwhile, employers in the Scottish construction sector have registered another sharp drop in confidence levels.

Only 9% expect to take on staff this year, while 30% expect to shed workers, with repair and maintenance seen as the best prospects for winning contracts.

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We are using every lever currently available to us to secure new investment and create and safeguard jobs”

End Quote Scottish government spokesman

Two thirds told the Scottish Building Federation survey that they expected to see public sector contracts fall away further this year.

With 79 firms completing the survey, only 10% see housebuilding picking up, while 40% say it will continue to decline from already low levels.

Michael Levack, of the SBF, said: "The industry has already lost 30,000 jobs in the space of a year. But with more firms anticipating they will have to make redundancies this year than those hoping to recruit, there's a real prospect that industry employment levels could drop further yet before they start to recover.

"Over the coming months, I hope the industry can work constructively with government at all levels to start rebuilding confidence that has been shattered by the economic downturn.

"An excellent place to start would be to start dismantling the huge unnecessary bureaucracy around procurement and planning that has stifled our industry for far too long."

A Scottish government spokesman said: "We are using every lever currently available to us to secure new investment and create and safeguard jobs, in the face of severe cuts from Westminster.

"We need the UK government to follow suit and implement a 'Plan MacB' approach for the UK economy - increasing capital investment, securing consumer confidence, and ensuring that businesses have access to finance to create the conditions necessary for recovery."

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