Recovery gets a boost as Scottish firms hire at fastest rate since 2007

SCOTTISH firms hired staff in April at the fastest rate in 42 months, hitting levels not seen since well before the economic crisis, research out today shows.

The upbeat jobs survey comes as another report reveals that public sector budget cuts in Scotland are expected to cause less pain over the next four years as a proportion of GDP when compared to some other parts of the UK.

The Centre for Economics and Business Research (CEBR) also believes that reduction in public sector spending across the UK will be lower than the European average.

The Bank of Scotland's (BoS) latest report on jobs, which measures demand for staff and placements, reveals a further improvement in the labour market north of the Border in April, which means that Scotland has "just caught up" with UK employment rates.

Both permanent and temporary appointments increased last month, the report found. Glasgow recorded the strongest increase in permanent staff placements, while Dundee saw the fastest rise in the placement of temporary workers.

IT and computing showed the strongest demand for permanent staff, while catering and hotels led demand for temps. While average salaries awarded rose "modestly" in the month, Edinburgh and Aberdeen saw the fastest rates of pay inflation.

The BoS "labour market barometer" registered 56.6 in April, where 50 signals growth, and was the highest since October 2007.

Donald MacRae, BoS's chief economist, said: "The latest report on jobs shows a further improvement in the Scottish labour market. The number of people placed in to permanent positions increased for the seventh consecutive month, while demand for permanent staff rose markedly in April, with recruitment consultants registering a larger number of vacancies.

"This month's report on jobs provides further evidence of the Scottish economy's recovery from the weather-induced slowdown of winter. However, Scotland has just caught up with the UK, despite the labour market barometer reaching a 42-month high."

The CEBR's 11th annual "state of the nation" report predicts that public expenditure in Scotland as a proportion of GDP will fall 5.4 per cent over the next four years. This compares with falls of 8.2 per cent in Northern Ireland, 7.1 per cent in Wales and 6.2 per cent in the north-east of England. As a result, public spending is set to account for 47.6 per cent of GDP in Scotland by 2014-15, compared with 41 per cent in England.

Across the UK, the change in public spending as a share of GDP will fall 2.2 per cent over the next two years compared with an average of 2.4 per cent in the eurozone - though this figure will be dragged down by 22.7 per cent cuts in Ireland.