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Scottish Economic Report: March 2004
3.6 Labour Market
The Office of National Statistics labour market data has consistently indicated a strong and stable labour market in Scotland over the past year.
Seasonally adjusted ILO employment in Scotland in October-December 2003 stood at 2,384,000. Among those aged 16-59/64, the employment rate was 73.7 per cent. Over the year to October-December 2003 this represented an increase of 4,000 (rate down by 0.5 percentage points). Regional data shows that, of the twelve standard UK regions, five had higher employment rates than Scotland:
Yorkshire & the Humber (74.1), East Midlands (76.1), South East and South West regions (both 79.0) and East (79.6). The lowest rate was in Northern Ireland at 66.9 per cent.
Chart 3.10 shows that between 1997 and 2003 the gender gap in employment and economic activity is narrowing slightly. In this period, the economic activity rate for males has shown a very small increase, whereas the economic activity rate for females has increased by 4 percentage points. For employment, both the male and female rates have increased. However for females the increase in the employment rate has been slightly higher than for males.
Seasonally adjusted unemployment in Scotland in October-December 2003 stood at 147,000. Among those aged 16 & over, the unemployment rate was 5.8 per cent. Over the year to October-December 2003, the Scottish figure fell by 10,000 (rate down 0.4 percentage points). Regional data shows that, of the twelve standard UK regions, four had unemployment rates either equal to or higher than Scotland: West Midlands (5.8 per cent), Northern Ireland (6.3 per cent), North East (6.4 per cent) and London (7.0 per cent). The lowest rate was in the (English) South West region (3.1 per cent).
Chart 3.11 below shows that in the period between Spring 1997 and Spring 2003, the ILO unemployment rates in Scotland and the UK decreased overall. Scotland has shown a greater percentage decrease in this period than the UK.
The seasonally adjusted number claiming Jobseeker's Allowance (Claimant Count) in Scotland in January 2004 stood at 96,000 (3.6 per cent). This represented a fall of 1,700 (rate down 0.1 percentage points) between December 2003 and January 2004. Over the year to January 2004, the number claiming Job Seeker's Allowance in Scotland fell by 3,600 (rate down 0.1 percentage points) when compared with a year earlier.
In the year to January 2004 the Jobseeker's Allowance rate 4 fell in 20 of the 32 unitary areas, showed no change in six (Clackmannanshire, East Ayrshire, East Renfrewshire, Glasgow City, Midlothian and Renfrewshire) and rose in six (Aberdeen City, Aberdeenshire, East Lothian, East Renfrewshire, Midlothian and Moray). Jobseeker's Allowance rates ranged from 1.6 per cent in Aberdeenshire to 5.3 per cent in North Ayrshire. The not seasonally adjusted rate for Scotland was 3.4 per cent.
Chart 3.12 below shows how the claimant count level and rate has fallen since 1992. It currently sits at its lowest level for 28 years.
The number of economically active (defined as in employment or ILO unemployed, seasonally adjusted) in Scotland in October-December 2003 stood at 2,532,000. Among those aged 16-59/64, the economic activity rate was 78.3 per cent. Regional data shows that, of the twelve standard UK regions, four had an economic activity rate higher than Scotland: East Midlands (79.6 per cent), South West (81.5 per cent), South East (82.2 per cent) and East (82.6 per cent). Northern Ireland ranked lowest (71.6 per cent).
Over the year to October-December 2003, the number of economically active fell in Scotland by 6,000 (rate down 0.9 percentage points).
Chart 3.13 overleaf shows that prior to 2000, the economic activity rate in Scotland lagged behind that in the UK. However, since Autumn 2002, the economic activity rate in Scotland has exceeded that of the UK. In the three most recent quarters, the Scottish rate has moved closer the UK rate.
These recent ONS Labour Market data portray a message of continuing stability. The fall in employment seen over the past two quarters has been attributed to the difficulties faced by manufacturing in the early part of 2003, and it is believed that there is a lag in re-recruitment as companies will have restructured over that period. It is still true that employment is around historically high levels and unemployment remains around historically low levels, with the figure showing UK Claimant Count at fewer than 3 per cent being especially noteworthy.
As a backdrop to this data, it is worth noting the change in labour market sentiments expressed by business surveys in recent months. The Royal Bank of Scotland PMI reported an expansion in the private sector labour market for December 2003 and January 2004. Furthermore, the CBI Scotland survey also cited numbers in employment stabilising in 2003 Q4.
Business survey evidence of labour market conditions has long been at odds with the actual data. More often than not, surveys would report the labour market to be in notable decline, only to be superseded by the official data which presented a robust labour market performing relatively well during the economic downturn.
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