Contractor demand on the rise in Scotland

Tuesday 20 August 2013

Contractors in Scotland saw demand increase again in July, according to new data, demonstrating that market conditions remain favourable for those who work for themselves.

According to the latest Bank of Scotland Report on Jobs compiled by Markit Economics, demand for temporary and contract staff north of the border shot up once again last month, at the quickest rate for 31 months. At the same time, permanent staff also enjoyed a sharp increase in the number of opportunities available to them. But this did not quite match June’s impressive performance, when vacancies grew at the quickest pace for 14 months.

As a further illustration of just how highly sought contract workers currently are, availability fell for the third month in a row. Given that the decline was the most dramatic since December 2004, it appears that the contractors who are left to fulfil this rising demand will be particularly highly sought.

Yet so far it appears that businesses in some areas have been struggling to find the right contractors to meet their requirements - although the average number of billings for temporary workers did increase, the rise was the weakest since March and demonstrated only modest improvement.

Over the same period, permanent workers also saw the job market improve markedly - permanent staff placements made through Scottish recruitment firms rocketed at the fastest rate in the decade-long history of the study, which perhaps explains why availability dropped quicker than it had for six years. The fact that businesses are more prepared to make a commitment to hiring permanent staff indicates that business confidence is picking up across Scotland.

“These results suggest rising business confidence is translating into a continuation of the

recovery in the Scottish economy this summer,” said Donald Macrae, chief economist at the Bank of Scotland.

Recruiters based in Aberdeen posted the biggest rises in placements for both permanent workers and contractors, which could well be the product of new investment in the oil and gas industry filtering into the local economy. Since Aberdeen also saw the sharpest drop in availability for contract workers, it looks possible that freelance talent with industry-specific skills could already be taking advantage of the new projects on offer. Even so, permanent staff availability declined the most in Glasgow.

Pay represented another interesting comparison between permanent workers and contractors. Staff employed on a long-term basis saw their average salaries improve for the fifth month in a row last month, even though the rate of inflation moved off the six-month high achieved in June. For contractors, however, hourly pay increased at the joint quickest pace since the data series began in January 2003.

Unsurprisingly, key contractor disciplines were among those showing the highest demand. After medical staff, which largely consists of nurses but also encompasses locums and other independent medical professionals, it was the engineering and construction sector that performed most strongly for contract talent. The IT and computing sector then took third place.

However, these technology skills actually topped the table when it came to demand for permanent staff, although engineering lagged in fourth place behind the medical sector and accounts and financial services.

By Victoria McDonnell

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