19 June 2026
Scottish Labour Market Shows Signs of Softening
The latest Scottish Economic Bulletin highlights that Scotland’s labour market remains relatively resilient but has weakened over the past year. While unemployment remains low by historical standards, a range of indicators suggest labour market conditions have softened during the first part of 2026.
The unemployment rate stood at 4.4% in the three months to March 2026, below the UK rate of 5.0%. However, the employment rate fell to 73.7%, while economic inactivity rose to 22.7%, indicating a gradual easing of labour market strength. The number of payrolled employees also fell to 2.44 million, down 0.6% over the year and the lowest level recorded since January 2023.
Further evidence of weaker conditions can be seen in claimant count data. Scotland’s claimant count unemployment rate was 3.7% in April 2026, lower than the UK rate of 4.4%, but the number of people claiming unemployment related benefits rose to 109,700. This represents an increase of 2.6% over the month and 4.3% over the year, reaching its highest level since November 2024.
Despite these challenges, earnings growth remains robust. Median monthly PAYE pay reached £2,659 in April, increasing by 5.6% annually in nominal terms and 2.7% in real terms after inflation. The Bulletin notes that while recruitment activity remains subdued, online vacancies have stabilised and many businesses expect staffing levels to remain unchanged over the coming months.
Read more in the Scottish Economic Bulletin: June 2026.
The unemployment rate stood at 4.4% in the three months to March 2026, below the UK rate of 5.0%. However, the employment rate fell to 73.7%, while economic inactivity rose to 22.7%, indicating a gradual easing of labour market strength. The number of payrolled employees also fell to 2.44 million, down 0.6% over the year and the lowest level recorded since January 2023.
Further evidence of weaker conditions can be seen in claimant count data. Scotland’s claimant count unemployment rate was 3.7% in April 2026, lower than the UK rate of 4.4%, but the number of people claiming unemployment related benefits rose to 109,700. This represents an increase of 2.6% over the month and 4.3% over the year, reaching its highest level since November 2024.
Despite these challenges, earnings growth remains robust. Median monthly PAYE pay reached £2,659 in April, increasing by 5.6% annually in nominal terms and 2.7% in real terms after inflation. The Bulletin notes that while recruitment activity remains subdued, online vacancies have stabilised and many businesses expect staffing levels to remain unchanged over the coming months.
Read more in the Scottish Economic Bulletin: June 2026.
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