04 May 2026
Scottish Government reports steady labour market amid emerging challenges
The Scottish Government has published its latest labour market insights for April 2026, indicating that Scotland’s labour market remains broadly stable despite signs of softening in recent months.
Employment remains relatively strong, though underlying inequalities persist. The employment rate for men continues to exceed that of women, with the gender gap widening slightly since 2022 after a period of narrowing. Gaps also remain for other groups. The disability employment gap has reduced over time but still stands at 32.5 percentage points, while minority ethnic groups continue to have lower employment rates than white groups, with a gap of 9.9 points.
Recent workforce trends show growth concentrated in certain groups and sectors. People aged 35 to 49 saw the largest increase in payrolled employment over the past year, while those aged 65 and over experienced the fastest percentage growth. By sector, Health and Social Work recorded the largest rise in employee numbers, while Energy Production and Supply saw the strongest percentage increase. Real median earnings rose modestly by 0.5% over the year to March 2026, reflecting limited wage growth after inflation.
Changes in workforce composition are also evident. Payrolled employment among non-EU nationals increased by over 10% in the year to December 2025, while employment among UK and EU nationals declined slightly over the same period.
For those not in work, short-term unemployment remains most common, with over half of unemployed people out of work for less than six months. However, economic inactivity continues to be a major challenge. Long term sickness or disability is now the most frequently cited reason, accounting for 34.7% of inactive individuals, the highest level recorded. At the same time, nearly one in five inactive people report that they would like to work, suggesting untapped labour potential.
There are also signs of weakening labour demand. The number of online job adverts fell by 13% over the year to February 2026, while only 15.6% of businesses reported recruitment difficulties, continuing a downward trend since 2022. This indicates that hiring pressures may be easing as economic conditions shift.
In response, the Scottish Government continues to prioritise targeted employability support. Programmes such as No One Left Behind have supported over 99,000 people into training and work-related opportunities since 2019, reflecting a long-term commitment to inclusive labour market participation.
Overall, the April 2026 insights present a picture of a stable but evolving labour market, where progress in employment is tempered by persistent inequalities, rising inactivity and softer demand for workers.
Read the full publication of Scotland's Labour Market Insights.
Employment remains relatively strong, though underlying inequalities persist. The employment rate for men continues to exceed that of women, with the gender gap widening slightly since 2022 after a period of narrowing. Gaps also remain for other groups. The disability employment gap has reduced over time but still stands at 32.5 percentage points, while minority ethnic groups continue to have lower employment rates than white groups, with a gap of 9.9 points.
Recent workforce trends show growth concentrated in certain groups and sectors. People aged 35 to 49 saw the largest increase in payrolled employment over the past year, while those aged 65 and over experienced the fastest percentage growth. By sector, Health and Social Work recorded the largest rise in employee numbers, while Energy Production and Supply saw the strongest percentage increase. Real median earnings rose modestly by 0.5% over the year to March 2026, reflecting limited wage growth after inflation.
Changes in workforce composition are also evident. Payrolled employment among non-EU nationals increased by over 10% in the year to December 2025, while employment among UK and EU nationals declined slightly over the same period.
For those not in work, short-term unemployment remains most common, with over half of unemployed people out of work for less than six months. However, economic inactivity continues to be a major challenge. Long term sickness or disability is now the most frequently cited reason, accounting for 34.7% of inactive individuals, the highest level recorded. At the same time, nearly one in five inactive people report that they would like to work, suggesting untapped labour potential.
There are also signs of weakening labour demand. The number of online job adverts fell by 13% over the year to February 2026, while only 15.6% of businesses reported recruitment difficulties, continuing a downward trend since 2022. This indicates that hiring pressures may be easing as economic conditions shift.
In response, the Scottish Government continues to prioritise targeted employability support. Programmes such as No One Left Behind have supported over 99,000 people into training and work-related opportunities since 2019, reflecting a long-term commitment to inclusive labour market participation.
Overall, the April 2026 insights present a picture of a stable but evolving labour market, where progress in employment is tempered by persistent inequalities, rising inactivity and softer demand for workers.
Read the full publication of Scotland's Labour Market Insights.
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