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The August Markit figures - Scotland is performing better than the UK average!

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What should we make of The Royal Bank of Scotland Report on Jobs for August?  Overall, it shows that, “permanent staff placements contracted for the second time in as many months (and) there were signs that firms were turning to short-term staff to fulfil jobs, as temporary billings rose at the fastest rate in five months, whilst temporary vacancy growth quickened from July.”  That might sound a bit, well, worrying, but we need to bear in mind that what this actually means is that the job market is STILL growing, even in our field of construction, which, if you believe all the doom and gloom, is shrinking faster than a snowman in a sauna.

Now, let’s not be too sanguine.  I know that the specific Markit PMI Report for the construction industry does not make good reading. As Trading Economics noted, “The IHS Markit/CIPS UK Construction PMI fell to 45.0 in August 2019 from 45.3 in the previous month and below market expectations of 45.9. The latest reading pointed to the fourth consecutive month of contraction in the construction sector, led by the sharpest reduction in new work since March 2009.

It’s only when you look at the Markit/KPMG jobs report for the UK as a whole that you start to see what’s happening here.  As the two graphs below show, for Construction/Engineering/Blue Collar, the figures are, for the most part (Perm Engineering being the outlier) negative (i.e. less than the magical figure of 50, which indicates growth).

UK Markit Perm

UK Markit Temp

Compare and contrast, as my old teacher used to say, those UK figures with the figures for Scotland shown below. 

Markit Scotland sectors

Admittedly, Engineering is lumped in with Construction for Scotland, but as you can see, for that category and for Blue Collar, which includes some trades, the figures are positive (i.e. [well] above 50).  Now I’m not an economist, but I can work out that there does seem to be some divergence between Scotland and the rest of the UK. Fortunately, most of our business is in Scotland. That doesn’t mean that the construction sector here is immune from the slings and arrows of the economy and our outrageous politicians and the Brexit shenanigans that have consumed the chattering classes for over three years now, but it does mean that we’re not doing quite as badly, at least on the jobs front, as many people seem to think – something that’s borne out by the amount of business our office has been transacting every month of 2019.

Chris Peace, MD, Peace Recruitment

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