Increased business activity amid employment challenges

However, despite new work hitting its highest level in three months, firms in Scotland remained less optimistic for the second month in a row.

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While these figures suggest an ongoing economic recovery, the lived experiences of workers show that the cost of living crisis continues to affect quality of life and spending habits. Six in ten people report that their living standards have not improved in 2024, with nearly four in ten saying they have worsened.

The effects on spending habits are clear: 42% of people say they have had to cut back on essentials like food and utilities, a figure that rises to 47% for women. When it comes to non-essentials like dining out or entertainment, 60% report reducing their spending.

The cost of living crisis is also affecting some people’s ability to pay household bills, with 19% saying they have fallen behind, a figure that rises to 28% for those aged 18-24. Additionally, over a quarter (27%) have taken out debt (loans, loans) to cover unexpected bills this year, with this figure rising to 37% for 25-49 year olds.

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While labor market performance is mixed across the UK, job creation in Scotland looked positive last month. Across the UK, 21% of firms plan to freeze or even reduce recruitment this year, with rising costs and deteriorating income topping the list of reasons.

READ MORE: s1jobs Insights looks at Scottish businesses and job search prospects in the Technical, Engineering, Oil & Gas, Retail and Hospitality sectors

One metric to watch is the impact of digital technology and automation on the number of jobs. Commentators suggest that the adoption of these technologies, including AI, could lead to job losses in the near future, although currently only 13% of managers cite these as factors in reducing employment.

Surveys asking jobseekers about the difficulty of finding a job in the UK have shown an increase over the past two years. Currently, 30% of job seekers say it is quite difficult to find a job, compared to 22% two years ago.

This figure is now back to where it was just before the Covid-19 pandemic. The number of job vacancies advertised in the UK continues to fall, suggesting one reason for this increase is the difficulty of securing employment.

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Between March and May 2024, there were 904,000 vacancies advertised across the UK, a slight drop of 12,000 from the previous quarter but the 23rd consecutive period of decline. Among industry sectors, there is a mixed picture, with a 50/50 split between those with reduced vacancies and those with increased vacancies.

At the same time, there has been a gradual increase in the unemployment figure to 4.7% in Scotland, the highest of the UK countries, marking a year-on-year increase of 1.4%. This increase in unemployment, along with the decrease in job vacancies, has brought the number of unemployed per job vacancy to 1.7, up from 1.5 in the previous quarter, contributing to the increased difficulty faced by job seekers.

John Wallis Head of Data Analytics at s1jobs.

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