THE rate of employment growth in Scotland is slowing due to skills shortages, keeping wages and salaries buoyant, according to September's Bank of Scotland Labour Market Report.
It shows Scotland's employment growth rate still ahead of the UK rate, but the growth gap between the two narrower than at any point this year.
The report's labour market barometer posted a reading of 59.4 in September, an eightmonth low. The index was still above the equivalent barometer for the wider UK economy - and well above the 50-point level which signals a growing labour market - though the UK barometer was 1.1 points behind compared with a gap of 2.7 points in August and 4.3 in June.
Demand rose for all broad categories of staff, with permanent staff most in demand in engineering and construction, and temporary employees most needed in the healthcare sector.
Tim Crawford, group economist at Bank of Scotland, said: "Although the Scottish labour market is still growing, the latest results suggest that employment growth rates are now starting to slow.
"Part of the slowdown seems related to reported difficulties in finding qualified staff. However, the growth rates in the Scottish labour market still seem better than the UK average and average salaries levels continue to rise."
Scottish recruitment consultancies reported a 40th consecutive monthly increase in demand for permanent staff, but the growth rate was the smallest in nine months.
Edinburgh saw the strongest rise in permanent placements, while temp billings were highest in Glasgow. Aberdeen registered the most skill shortages for both permanent and temporary staff. Permanent salaries rose for the 39th consecutive month.
The rate of pay growth remained close to August's series high, with consultants reporting that skill shortages were key factors driving up salaries. Temporary/contract staff pay also increased, underpinned by firm demand for short-term workers.
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