Scottish businesses are hiring more temporary staff due to the uncertainty of Brexit, an economist has said.
Sebastian Burnside, chief economist at the Royal Bank of Scotland, claimed the UK’s exit from the European Union has caused more firms to fill posts with temporary staff due to a lack of long-term clarity.
As part of its recent Report on Jobs, the bank found the decline of permanent placements continued for the third month in a row during September, with the number of temporary placements seeing a rise during the same period.
The report is compiled by asking 100 companies if they feel certain parts of the jobs market have changed in the past month.
The researchers collate each answer into an index number between zero and 100, with 50 meaning no change, above 50 meaning an upward shift and below 50 meaning a downward trend over the previous month.
For the number of permanent placements, the number has fallen from 48.8 in August to 47.4 last month.
The drop in permanent work was the sharpest monthly decline since January 2017.
The index for the number of billings received by recruitment agencies continued to rise, though the jump was less sharp than in August, at 56.
A number of panellists asked for their input said uncertainty – particularly around Brexit – had impacted on hiring decisions.
Mr Burnside said: “The latest survey data highlighted a contraction in permanent placements in Scotland for the third month in a row, with the fall accelerating to the sharpest since January 2017.
“Overall, September data showed little signs of a recovery, with the Scottish labour market registering a relatively subdued performance in the context of historical data.
“Moreover, uncertainty continues to weigh on hiring decisions, with firms turning to short-term staff to fill vacancies until there is greater clarity around Brexit.”
Jamie Hepburn, minister for fair work and skills, said: “This report continues to signal Brexit uncertainty is weighing on business confidence and activity in Scotland.
“Any form of Brexit threatens to be damaging to Scotland’s economy, and we are clear that a no-deal outcome has the potential tip the Scottish economy into recession.
“Scotland’s labour market has performed exceptionally well in recent times, breaking records on employment and unemployment – however, these achievements are threatened by the huge ongoing uncertainty of Brexit.
“Despite this, we will continue working to create the right economic conditions for employment, such as Our Prepare for Brexit campaign to help build economic resilience through offering grants to support businesses to have a response plan in place.”