The latest figures on the labour market in Scotland are summarised. Over the last quarter, Labour Force Survey (LFS) data showed that employment increased by 16 thousand in the three months to May 2002, to 2,376 thousand - up 0.7 per cent on the previous quar ter level. Over the year to May 2002, employment fell by 3 thousand. The employment rate - as a percentage of the working age population in employment - increased to 73.1 per cent, up 0.5 percentage points on the previous quarter. The paper provides an account of quarterly LFS employment over a two-year period to May 2002

Ferguson, Linda

English

Name not available

Overview of the labour market [October 2002]

University of Strathclyde Institutional Repository

Strathprints Institutional RepositoryFerguson, Linda (2002) Overview of the labour market [October 2002]. Quarterly EconomicCommentary, 27 (3). pp. 25-31. ISSN 0306-7866Strathprints is designed to allow users to access the research output of the University of Strathclyde.Copyright c© and Moral Rights for the papers on this site are retained by the individual authorsand/or other copyright owners. You may not engage in further distribution of the material for anyprofitmaking activities or any commercial gain. You may freely distribute both the url (http://strathprints.strath.ac.uk/) and the content of this paper for research or study, educational, ornot-for-profit purposes without prior permission or charge.Any correspondence concerning this service should be sent to Strathprints administrator:mailto:strathprints@strath.ac.ukhttp://strathprints.strath.ac.uk/  Overview of the labour market  The latest figures on the labour market in Scotland are summarised in Table 1.  Over the last quarter, Labour Force Survey (LFS) data showed that employment increased by 16 thousand in the three months to May 2002, to 2,376 thousand - up 0.7 per cent on the previous quar ter level. Over the year to May 2002, employment fell by 3 thousand. The employment rate - as a percentage of the working age population in employment - increased to 73.1 per cent, up 0.5 percentage points on the previous quarter.  Figure 1 provides an account of quarterly LFS employment over a two-year period to May 2002.  The preferred measure of unemployment by the Interna- tional Labour Organisation (ILO) increased to 173 thousand during the period March to May 20021. The ILO unemploy- ment rate - as a proportion of those engaged in economic activity - increased to 6.8 per cent in the three months to May 2002.  This represented a rise of 0.3 percentage points on the previous quarter rate (6.5 per cent), and up 1.1 percentage points on the same period a year earlier (5.7 per cent).  Economic activity includes those individuals actively seeking employment and currently in employment (i.e. self- employed, government employed, unpaid family workers, and those on training programmes). Table 1 shows that the level of those engaged in economic activity increased slightly over the last quarter.  There were 2,549 thousand economically active people in Scotland during March to May 2002.  This was comprised of 2,376 thousand in employ- ment and 173 thousand ILO unemployed. Hence, taking account of the increase in employment (of 16 thousand) and the rise in ILO unemployment (of 10 thousand), the total number of economically active people in Scotland increased by 26 thousand in the period March to May 2002.  The corresponding level for those economically inactive fell to 682 thousand, down 24 thousand on the previous quar ter.  Overall, the latest figures on the labour market suggest that the increase in ILO unemployment may be partly attributed to a movement between economic inactivity and unemploy- ment, where previously inactive individuals may now be actively looking for work, or available for work.  The traditional measure of Scottish claimant count unem- ployment - a count of claimants on unemployment related benefits - is detailed in Table 2.  The most recent (season- ally adjusted) claimant count figure for August 2002 stood at 101.1 thousand, which represents a slight fall of 800 on the previous month. The claimant count rate fell by 0.1 percentage points - from 4.1 per cent the previous month - to 4.0 per cent in August 2002.  Although this represents only a marginal fall, this is the first time the claimant count rate has fallen since April where it remained unchanged at 4.1 per cent between May and July of this year.  Figure 2 plots ILO and claimant count unemployment as an index for the period Januar y 1999 to June 2002.  Overall claimant count unemployment has been generally falling since January 1999, though remaining relatively steady over the past year.  By comparison, ILO unemployment has fluctuated more widely, but still on a downward trend, and most likely reflects movements between the level of employment and the number of people economically active at any one time. Hence, the difference between the ILO and claimant count definitions of unemployment mirror the distinction between those actively seeking work (but are jobless) and those who are eligible for unemployment benefit payments.  Figure 3 illustrates the gap between Scottish claimant count unemployment against the level of unfilled vacan- cies, using data up until April 2001.  By multiplying the number of vacancies by three - to account for under- reporting by job centres - it is evident from figure 3 that the level of unfilled vacancies against claimant count unem- ployment increased steadily between July 2000 and April 2001.  This suggests a continued tightening of the labour market between this period, with some easing between Januar y and April 2001 where the gab appears to narrow slightly.  The release of job centre vacancy statistics is still unfortu- nately delayed.  The National Statistics have deferred their release of updated figures due to distortions in the data since May 2001, resulting mainly from the introduction of Employer Direct2.  Labour Force Survey (LFS) data provides the industrial composition of the total number of individuals in employ- ment within Scotland. Table 3 shows that over the year so far, the percentage share of employment within manufac- turing declined to just 13.1 per cent, down 1.2 percentage points on the same period a year earlier. The share of employment within service industries fell slightly to 71.8 per cent between March and May 2002, but has remained relatively stable over the past year or so3.  However, the percentage share of employment within the Banking and Finance sector has steadily increased over recent months, increasing to 14.6 per cent in March to May 2002, from 12.6 per cent the same period a year earlier.  These figures suggest that the share of employment is gradually shifting from manufacturing to services, and Banking and Finance.  The most recent figures for the number of employee jobs by industrial activity are detailed in Table 4.  Employee jobs figures are a measure of jobs rather than people.  Total employee jobs for the period ending March 2002 increased to 2,206 thousand, up 12 thousand on the previous quar ter, but 10 thousand lower on the same period a year earlier.  The number of jobs in the manufacturing industry   fell slightly over the latest quarter, losing 8 thousand jobs places on the previous period, and 25 thousand over the year.  Over the same period, the service industry lost 17 thousand job fills on the previous quar ter, but over the year as a whole this accounted to a total loss of 4 thousand employees.  Table 5 and figure 4 show the proportion of workers employed as managers and senior officials, professionals, associated professionals, and technical occupations. These professions can be grouped together to be classified as highly skilled jobs. The most recent data (refer to table 5) show that during March to May 2002 the share of highly skilled employment within Scotland and Great Britain stood at 37 per cent and 40 per cent respectively. Figure 4 illustrates that the share of Scottish employment within highly skilled jobs has been rising since the early nineties, but on the whole, continuing to lag slightly behind Great Britain.  However, more recently, the number of highly skilled jobs in Scotland increased by 3.4 per cent between March to May 2002 on the same period a year earlier and by 2.3 per cent in Great Britain respectively.   Outlook Scotland’s labour market has responded well in light of last year’s global uncertainty. The employment rate has remained close to historically high levels, increasing slightly to 73.1 per cent in the three months to May 2002. The claimant count rate increased to 4.2 per cent in April 2002 - up 0.1 percentage points on the previous month - yet current levels of claimant count unemployment remain low relative to those for the same period one year earlier.  ILO unemployment increased slightly over recent months, with the rate of unemployment remaining relatively stable at 6.8 per cent up to May 2002.  While there have been signs of some weakening in the Scottish labour market over the second half of 2001, continuing into 2002, the outlook remains healthy relative to historical standards. Overall, labour market sentiments are mixed, but mainly optimistic. Unemployment is likely to remain low over the next few years.  There has been continued growth in Scottish services sector demand - but remaining weak in manufacturing - with continued employment growth in the financial services and banking sector, helping to offset recent job losses in manufacturing.   Endnotes 1.    The Labour Force Survey definition of ILO unemploy- ment takes precedence over the claimant count measure.  ILO unemployment is much less sensitive to changes in the regulations governing unemployment benefit, and conforms to a widely accepted standard to allow for more meaningful cross-country comparisons.  2.    Employer Direct involves transferring the vacancy- taking process from local Jobcentres, to regional Customer Service Centres (National Statistics).  3.    Highly skilled jobs include sections 1-3 of the Standard Occupational Classification (SOC). Figure 4 illustrates the trend in the number of workers in highly skilled jobs between 1999 and 2002, as an index (1993=100). However, pre-2001 data relates to SOC 1990, and post- 2001 data relates to SOC 2000, therefore, the absolute levels of highly skilled jobs over this period should be interpreted with slight caution.           Linda Ferguson 20 September 2002   Table 1: Recent developments in the Scottish labour market (1)      Employment*     Dec 2000-Feb 2001  Level (000s)  2,382  Rate (%)  73.6  Mar-May 2001 2,379 73.4  Jun-Aug 2001 2,394 73.7  Sep-Nov 2001 2,391 73.7  Dec 2001-Feb 2002 2,360 72.6  Mar-May 2002 2,376 73.1  ILO Unemployment**  Dec 2000-Feb 2001  149  5.9  Mar-May 2001 145 5.7  Jun-Aug 2001 181 7.0  Sep-Nov 2001 167 6.5  Dec 2001-Feb 2002 163 6.5  Mar-May 2002 173 6.8  Economically active*  Dec 2000-Feb 2001  2,531  78.3  Mar-May 2001 2,524 78.0  Jun-Aug 2001 2,574 79.4  Sep-Nov 2001 2,558 78.9  Dec 2001-Feb 2002 2,523 77.7  Mar-May 2002 2,549 78.5  Economically inactive***  Mar-May 2001  698  22.0  Jun-Aug 2001 651 20.6  Sep-Nov 2001 667 21.1  Dec 2001-Feb 2002 706 22.3  Mar-May 2002 682 21.5      Source: National Statistics, Nomis (Labour Force Sur vey)  Notes:  (1)  Data available up until 20 September 2002  * Levels are those aged 16 and over, rates are for those of working age (16-59/64) **  Levels and rates are for those aged 16 and over. Rate is a proportion of economically active *** Levels and rates are for those of working age   Table 2: Claimant count unemployment*   (000’s)  Claimant count (seasonally adjusted)  Claimant flows (seasonally adjusted)  Claimant count (unadjusted)     1999    Januar y Level  135.6 Rate  5.3 Off-flow  29.9 On-flow  28.3 Level  146.5 Rate  5.8  Februar y 134.9 5.3 29.2 28.0 145.4 5.7  March 134.4 5.3 29.5 29.2 142.8 5.6  April 133.9 5.3 30.5 29.2 139.0 5.5  May 132.6 5.2 30.1 29.4 134.7 5.3  June 132.9 5.2 29.3 29.6 133.7 5.3  July 130.2 5.1 32.2 29.3 138.7 5.4  August 128.8 5.1 31.0 29.5 137.3 5.4  September 128.5 5.0 30.3 29.1 126.4 5.0  October 126.1 5.0 29.5 27.9 121.1 4.8  November 124.6 4.9 29.8 28.3 120.0 4.7  December 122.2 4.8 29.8 28.0 119.8 4.7 2000 Januar y 123.1 4.9 27.6 27.3 134.0 5.3  Februar y 122.4 4.9 29.3 28.4 133.5 5.3  March 121.5 4.8 29.1 28.2 130.6 5.2  April 119.5 4.8 29.0 27.1 123.6 4.9  May 118.6 4.7 29.6 29.1 120.6 4.8  June 116.8 4.7 29.0 26.7 117.3 4.7  July 115.0 4.6 29.2 27.2 121.9 4.9  August 113.7 4.5 28.9 27.1 120.8 4.8  September 112.6 4.5 27.6 27.2 109.7 4.4  October 111.9 4.5 27.7 26.8 106.5 4.3  November 110.7 4.4 27.8 26.6 106.4 4.2  December 110.0 4.4 27.0 27.0 108.0 4.3 2001 Januar y 108.6 4.3 27.3 27.0 119.3 4.8  Februar y 107.7 4.3 27.8 27.3 118.9 4.7  March 106.5 4.3 27.7 26.6 115.8 4.6  April 105.4 4.2 27.8 26.5 109.7 4.4  May 105.1 4.2 26.6 26.5 106.7 4.3  June 104.6 4.2 27.0 26.7 104.7 4.2  July 102.3 4.1 26.8 25.7 108.2 4.3  August 103.4 4.1 26.4 27.0 109.4 4.4  September 104.1 4.2 26.3 27.0 100.5 4.0  October 104.7 4.2 27.0 27.6 99.2 4.0  November 105.4 4.2 26.6 27.5 101.2 4.0  December 104.6 4.2 27.4 27.0 102.5 4.1 2002 Januar y 103.5 4.1 27.4 26.9 113.6 4.5  Februar y 102.2 4.1 26.8 26.3 113.1 4.5  March 103.1 4.1 27.0 26.9 110.2 4.4  April 104.1 4.2 26.8 28.1 108.4 4.3  May 103.0 4.1 29.7 28.2 104.7 4.2  June 102.7 4.1 27.3 27.5 102.9 4.1  July 101.9 4.1 26.8 26.8 106.8 4.3  August 101.1 4.0 27.2 26.8 106.9 4.3     Source: National Statistics, Nomis (Benefits Agency administration system)  Note: (1) Data available up until 20 September 2002 QUAR TERLY ECONOMIC  COMMENTARY Table 3: Industrial composition of total in employment (LFS), percentage share      Dec 2000-Feb 2001 Manufacturing (%)  15.3 Banking & Finance (%)  12.5 All services (%)  72.4 Mar-May 2001 14.5 12.6 73 Jun-Aug 2001 14.3 12.9 72.4 Sep-Nov 2001 14.1 13.5 72.2 Dec 2001 - Feb 2002 14.1 13.8 72.2 Mar-May 2002 13.3 14.6 71.8  Source: National Statistics, Nomis (Labour Force Sur vey)  Notes: Where manufacturing covers SIC section D, banking and finance covers sections J and K and all services covers section G-Q     Table 4: Employee jobs by industry    All jobs (seasonally adjusted)  All jobs  Agriculture Forestry & Fishing  Mining Energy & Water Supplies Industries  Manufacturing Industries  Construction  Service Industries  Other Industries  SIC92   A-Q  A,B  C,E  D  F  G-K  L-Q  Mar-99  2,140  2,123  40  43  316  131  922  670 Mar-00 2,147 2,131 40 39 307 132 933 680 Mar-01 2,216 2,198 34 36 296 131 982 718 Jun-01 2,208 2,210 36 37 293 129 994 723 Sep-01 2,189 2,191 35 38 287 121 988 722 Dec-01 2,194 2,206 33 38 279 119 995 742 Mar-02 2,206 2,190 34 37 271 122 978 748  Source: National Statistics: Labour Market Statistics, Scotland (First Release, September 2002)    Table 5: Proportion of employment in highly skilled jobs     Level (000’s)  Scotland Rate (%)   Level (000’s)  Great Britain Rate (%)  Mar-May 2001  858  36  10,747  39 Jun-Aug 2001 856 36 10,826 39 Sep-Nov 2001 892 37 10,960 40 Dec 2001-Feb 2002 855 36 10,861 39 Mar-May 2002 887 37 10,995 40     Source: National Statistics, Nomis (Labour Force Sur vey)  Notes: Highly skilled jobs includes sections 1-3 of the Standard Occupational Classification (SOC 2000) QUAR TERLY ECONOMIC  COMMENTARY Table 3: Industrial composition of total in employment (LFS), percentage share   Level (000's)  2,420    2,400    2,380    2,360    2,340    2,320    2,300    2,280  Mar-May 1999 Jun-Aug 1999 Sep-Nov 1999 Dec-Feb 2000 Mar-May 2000 Jun-Aug 2000 Sep-Nov 2000 Dec-Feb 2001 Mar-May 2001 Jun-Aug 2001 Sep-Nov 2001 Dec-Feb 2002 Mar-May 2002  Quarter  Source: National Statistics (Nomis)  Figure 2: Claimant  count and ILO unemployment  in Scotland, January 1999 - June 2002  Index (January 1999 = 100)  110   105   100  CC Index ILO Index   95   90   85   80   75   70 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May 1999 2000 2001 2002 Month/Year  Source: National Statistics (Nomis) Vol.27 No.3, pp.25-31.   Figure 3: Scottish unemployment (claimant  count) against the level of Scottish vacancies*   Level (000's)  150   140  Unfilled Vacancies (000's) Claimant Count (000's)   130   120   110   100   90   80   70 Jan      Feb     Mar     Apr     May     Jun      Jul      Aug     Sep   Oct     Nov   Dec     Jan      Feb     Mar     Apr     May     Jun      Jul      Aug     Sep   Oct     Nov   Dec     Jan      Feb     Mar     Apr 1999 2000 2001 Month/Year  *Vacancies notified to job centres multiplied by three (latest figures available)  Source: National Statistics (Nomis)  Figure 4: Employment in highly skilled jobs*,  Scotland and Great Britain   Index (Q1 1993 = 100)  130   125   Scotland Great Britain  120   115   110   105   100  SOC 2000   95 Q1 1993  Q3 1993  Q1 1994  Q3 1994  Q1 1995  Q3 1995  Q1 1996  Q3 1996  Q1 1997  Q3 1997  Q1 1998  Q3 1998  Q1 1999  Q3 1999  Q1 2000  Q3 2000  Q1 2001  Q3 2001  Q1 2002 Quarter  *Highly skilled Jobs includes sections 1-3 of the Standard  Occupational Classification (SOC).  Pre-2001  data relates to SOC 1990.  Post-2001  data relates to SOC 2000.     Source: National Statistics (Nomis) Vol.27 No.3, pp.25-31.    

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