Job prospects 'likely to be more challenging than forecast'
The next two years could be more challenging than was envisaged for jobs in Scotland, economics experts have warned.
The next two years could be more challenging than was envisaged for jobs in Scotland, economics experts have warned.
A new report from the Fraser of Allander Institute think-tank and the Scottish Centre for Employment Research said while the labour market "continues to perform relatively well" with the jobless total falling, the number of people in full-time jobs and the number of hours worked are both decreasing too.
The drop in unemployment "appears to stem not from people finding work", it added, but instead is a result of reduction in the number of people who are actively looking for work.
The number of Scots out of work has fallen by 38,000 over the last 12 months, but the report said this must be viewed in the context of employment shrinking by 12,000 and an increase of 54,000 in the number of people who are classed as economically inactive - who are not in work and who are not actively seeking a job.
The report warned: "The outlook for job prospects had been improving, but most forward indicators - in both the UK and Scotland - suggest 2017 and 2018 will be more challenging than was envisaged prior to the summer.
"Brexit and the continuation of fiscal consolidation in the public sector will not help."
It also cautioned: "In the near term, employment growth - in both Scotland and the UK - is projected to slow, as companies respond to a subdued outlook and above-average levels of uncertainty."
The first Scottish Labour Market Trends report was published just two days after official figures showed Scotland's unemployment rate stands at 4.7%, just below the rate of 4.8% recorded for the UK as a whole.
There were 129,000 people out of work in Scotland in the period July to September, a drop of 14,000 over the quarter.
But employment dropped by 25,000 over the three months, with the number in work recorded as being 2,604,000.
Professor Graeme Roy, director of the Fraser of Allander Institute based at Strathclyde University, said "Policy makers typically focus on unemployment as the key barometer of the health of Scotland's labour market. However, this can often miss some subtle - but crucial - developments which tell us a great deal about the overall resilience of the Scottish economy.
"For instance, to understand what is happening to unemployment, we need to look at what is happening to inactivity; to understand what is happening to employment we need to look at what is happening to part-time employment, levels of underemployment and job security.
"The purpose of this new publication is to help policy makers and business gain insight into what is driving these headline trends.
"Most forward indicators - at least at the UK level - suggest that the outlook for 2017 and 2018 is weaker than it was just six months ago. Arguably, the most significant development over the coming months will be the prospect of higher inflation.
"With heightened economic uncertainty and ongoing fiscal restraint in the public sector, the near-time outlook for people in work is likely to be just as important an issue for policy makers as the prospects for those still seeking work."