New Report Highlights Strong Performance of the Scottish Labour Market

The performance of Scotland’s labour market is strong, according to the latest findings from Futureskills Scotland. The Scottish Labour Market 2006 report, published tomorrow (20 October 2006), shows that the labour market is meeting the needs of the majority of Scottish employers and workers.

Employment rates are at an all-time high and for the first time in a decade, unemployment has fallen to a rate that is similar to that of the UK.

The report has drawn together Futureskills Scotland’s research into the Scottish labour market and is supplemented by other evidence around specific topics such as migration, earnings and educational attainment. Professor David Bell, Head of the Department of Economics, the University of Stirling, was among the contributors who worked with Futureskills Scotland to compile the report.

The main conclusions drawn from the analysis are:

Scotland’s education and training system produces labour of high quality when compared internationally and which meets most employers’ needs most of the time.
In terms of supply and demand, Scotland’s labour market works well for many people and in many places, but for a significant minority of people and places it does not.
Particular areas where the labour market does not work so well are around very small firms, growing businesses and those at the lower end of the occupational scale.
Scotland’s population is rising. The size of the workforce will be broadly static over the foreseeable future. The main issue will be around the age structure of the workforce, with a greater proportion in the older age groups.
There are some 300,000 people in Scotland who say that they would work if there was a suitable job available. Scotland will have sufficient people to meet any foreseeable upturn in the demand for labour.
EU enlargement has broadened the labour pool from which Scottish employers can draw. The impact on the labour market has been moderate, but broadly positive. Migrant workers from recent accession states are employed generally in low-paid, low-skilled work.
The recent increase in graduate numbers has been what Scotland’s economy needed. Graduates have traditionally earned more, on average, than non-graduates. This remains true today, even with the large increase in graduate numbers.
There will be modest growth in the number of jobs to 2014.
Employment in the service sector will continue to increase, alongside continued decline in primary and manufacturing jobs, albeit at a slower rate than in the past.
Scotland’s workforce will be increasingly better-qualified as younger workers with better qualifications enter the labour market and older workers with fewer qualifications leave it.

Dr. Patrick Watt, Head of Futureskills Scotland, said:

“The Scottish Labour Market 2006 reveals a positive story. There has been strong performance, both in historical terms and relative to the UK position. The recent increase in graduates has been what Scotland has needed. Similarly, migrant workers from the accession states have had a modest, but broadly positive, impact on the Scottish labour market."

"The labour market in Scotland generally works well for employers, but there is no room for complacency. In some places, and for some groups, the labour market works less well. Recent national initiatives, such as Workforce Plus and More Choices, More Chances the national strategy to assist young people Not in Employment, Education or Training (NEET), recognise the importance of work in tackling poverty."

The Scottish Labour Market 2006 can be downloaded from the front page of the Futureskills Scotland under New Reports.

19/10/06