State of the Labour Market Strategic Labour Market Group March 2018 - - PowerPoint PPT Presentation

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Dec 19, 2022 350 likes •465 views

State of the Labour Market Strategic Labour Market Group March 2018 Summary Subdued growth: Output growth in the Scottish economy continued to grow into the third quarter of 2017 (+0.2%) but economic growth remains notably below its long

SLIDE 1

State of the Labour Market

Strategic Labour Market Group March 2018

SLIDE 2

Summary

Subdued growth: Output growth in the Scottish economy continued to grow into the

third quarter of 2017 (+0.2%) but economic growth remains notably below its long run trend rate.

Resilient labour market: Scotland’s employment rate (74.3%) remains high by

historical standards and unemployment (4.5%) remains close to record lows. However, Scotland’s employment rate is now lower and unemployment and inactivity rates higher, compared with the UK’s.

Employment Demographics: For women, the employment rate increased over the

year (71.3%) and unemployment fell (3.6%). Both rates currently outperform the UK (70.8% & 4.4%).

Sector employment changes: Employment has declined most notably in distribution,

hotels & restaurants and to a lesser extent in public admin., education & health. Other services, transport & communications and banking, finance & insurance have seen the largest employment increases.

Regional impacts: Sector changes are impacting different regions in different ways,

with some, such as Aberdeen, impacted negatively due to sector-specific shocks (decline of oil & gas sector).

Longer term features of the Labour Market in Scotland include an ageing workforce, a

reducing gap between male and female employment rates and an increasing proportion

f employees working under zero hours contracts.

SLIDE 3

Recent performance – subdued growth GDP

Output growth in the Scottish economy picked up in the first half of 2017 and

continued into Q3 (+0.2%) following relatively weak growth in 2016. However, economic growth remains below its long run average.

Output growth in Q3 and over the past year was driven by the services and

production sectors, offsetting contraction in the construction sector.

Source: Scottish Government

SLIDE 4

Recent performance – resilient labour market Employment

Since the recession the labour market has remained remarkably resilient.
Scotland’s employment rate (74.3%) has risen by 4.6 percentage points since 2010.
Employment levels in Scotland have risen to over 2.6 million, close to record highs, with

68,000 more people in employment than the pre-recession peak (2008).

68 70 72 74 76 Oct-Dec 2008 Oct-Dec 2009 Oct-Dec 2010 Oct-Dec 2011 Oct-Dec 2012 Oct-Dec 2013 Oct-Dec 2014 Oct-Dec 2015 Oct-Dec 2016 Oct-Dec 2017

Per cent

UK Scotland

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Recent performance – resilient labour market

Unemployment Inactivity

Scotland’s unemployment rate (4.5%) has mainly been higher than the UK’s (4.4%) –

partly due to decline of oil & gas sector. Until Oct-Dec 2017, Scotland’s unemployment rate was lower than the UK’s for 11 consecutive monthly labour market releases.

Scotland’s inactivity rate rose last quarter to 22.1%, higher than the UK’s rate (21.3%).

1 2 3 4 5 6 7 8 9

Oct- Dec 2008 Oct- Dec 2009 Oct- Dec 2010 Oct- Dec 2011 Oct- Dec 2012 Oct- Dec 2013 Oct- Dec 2014 Oct- Dec 2015 Oct- Dec 2016 Oct- Dec 2017

Per cent UK Scotland

18 19 20 21 22 23 24 25

Oct- Dec 2008 Oct- Dec 2009 Oct- Dec 2010 Oct- Dec 2011 Oct- Dec 2012 Oct- Dec 2013 Oct- Dec 2014 Oct- Dec 2015 Oct- Dec 2016 Oct- Dec 2017

Per cent UK Scotland

SLIDE 6

Recent performance - earnings

Source: Annual Survey of Hours of Earnings 2017, ONS

Of all the regions in the UK, Scotland has the third highest average weekly full-time

earnings at £547.30 and 2.4% growth over 2017.

However, new experimental HMRC PAYE data shows Scotland to have the lowest growth
f average PAYE pay per individual of any UK region/country for 2015/16 & 2016/17.

Annual Weekly Earnings Growth, Scotland, 2017

SLIDE 7

Employment Demographics

Gender Self-employment

The employment rate for women (71.3%) increased over the year to Oct-Dec 2017

and remains above the UK rate (70.8%). The employment rate for men has also increased (77.6%) but remains below the UK rate (79.7%).

The number of self-employed has increased by 18,000 over the year to Oct-Dec 2017

to 326,000.

Source: Labour Force Survey ONS (Jun-Aug 2017) 60 62 64 66 68 70 72 74 76 78 80 82

19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17

Employment Rate % (16-64)

Scotland - Males UK - Males Scotland - Females UK - Females

SLIDE 8

Employment – annual sector changes

This chart shows employment growth in Scotland over 2015 and 2016.

Employment level has declined by the largest amount in distribution, hotels and
restaurants. Public admin, education & health, manufacturing and energy & water have

also been impacted negatively. Whereas construction, banking, finance & insurance, transport & communications and other services have seen employment increases.

Some of these negative changes reflect the impact of oil price declines on the oil and gas

sector & supply chains. Others reflect declines in local government employment.

Source: Business Register and Employment Survey 2015 and 2016

25,000
20,000
15,000
10,000
5,000

5,000 10,000 15,000 20,000 25,000

R-U:other services H,J:transport and communications K-N:banking, finance and insurance F:construction A:agriculture and fishing B,D,E:energy and water C:manufacturing O-Q:public

admin. education

and health G,I:distribution, hotels and restaurants

Annual Change in employment level

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Employment – Annual regional changes %

These changes to sector employment have had different impacts on regions.
Notable changes include in Aberdeen and Aberdeenshire, which along with the

Shetland Islands have been negatively impacted by the oil-price shock.

The majority of other local authorities that have seen a fall in employment over the last

year have been impacted by falls in manufacturing and public sector employment.

Source: Annual Population Survey: July 2016-June 2017, ONS

0.0 1.0 2.0 3.0 4.0 5.0 Shetland Islands South Ayrshire West Dunbartonshire Perth and Kinross Aberdeenshire Aberdeen City East Renfrewshire Eilean Siar Falkirk Dumfries and Galloway North Ayrshire Scottish Borders Orkney Islands Moray North Lanarkshire Angus Clackmannanshire Dundee City Highland Glasgow City Stirling East Ayrshire Fife South Lanarkshire East Lothian West Lothian Renfrewshire East Dunbartonshire Edinburgh, City of Argyll and Bute Inverclyde Midlothian

percentage point change in employment rate

SLIDE 10

Longer Term Labour Market Trends

Occupation Skill Level

Taking a longer-term view of the Labour Market in Scotland:

The bulk of jobs created over the past decade have been in medium to high skilled

jobs.

Employment amongst those aged over 65 has doubled over the last decade.