Contractor demand in Scotland bounced back in July, after June’s fall from a 22-month high. However, the rebound in contract billings was led by growth in non-core contracting sectors, leaving IT, engineering and construction still in growth territory, but with the latter showing only modest gains.
July’s Bank of Scotland Report on Jobs shows that, despite being knocked from number one position in the demand table by secretarial and clerical, Scotland’s IT and computing contracting industry continues to significantly outperform the rest of the UK. IT showed a ‘marked rise’ in July, and clients experienced falling availability of contractors in key locations, such as gaming industry hotspot Dundee.
Scotland’s engineering and construction sector is performing less well compared to the UK as a whole, showing only modest gains in July, despite a recent run of energy and oil and gas investment in the country. And demand for contractors in the accounts and financial sector was one of only two Scottish contracting sectors to fall in July, in line with falling financial sector hiring in the rest of the UK.
Permanent hiring in Scotland fell for the first time since December 2011, despite an increase in permanent vacancies. This suggests a skills mismatch, which could work in the contracting sector’s favour in the short term, as clients fill gaps with contractors whilst waiting for permanent hires to become available or relocate.
“The Scottish labour market showed a marginal improvement in July, but is losing momentum,” explains Bank of Scotland chief economist Donald MacRae. “The number of people appointed to permanent jobs declined for the first time this year, showing the effect of the current slowdown in the economy. However, the number of vacancies continued to increase, giving hope that the upwards trend in employment can be maintained.”
With demand growth for IT contractors 12.2% greater in Scotland when compared to the UK as a whole, and contractor availability in some key IT markets falling, there may be a strong argument for IT contractors elsewhere in the UK to consider relocation, particularly if their local contract supply is weak.