Hiring activity across Scotland fell again in February, according to the latest Royal Bank of Scotland Report on Jobs survey, compiled by S&P Global.

Recruiters reported falls in both permanent staff appointments and temporary billings.

However, trends diverged as permanent placements fell at the quickest pace in 15 months, while the downturn in temp billings moderated since January.

According to anecdotal evidence, economic uncertainty and subdued demand for staff had weighed on hiring decisions.

“The latest recruitment survey continues to highlight reduced hiring activity across Scotland amid a backdrop of lingering economic uncertainty,” Sebastian Burnside, chief economist at Royal Bank of Scotland.

“While lower confidence meant that employers remain wary of taking on additional staff, there were also reports that shortages of suitably-skilled workers had impacted recruiters abilities to fill roles.

“At the same time, candidates were cautious to seek new opportunities, instead favouring security in their current roles or pausing their job search.

“With vacancies continuing to fall, this suggests that we could see a further deterioration in hiring conditions across Scotland in the months to come.

“However, starting pay for both permanent new joiners and temp workers continued to increase at marked rates, suggesting that while overall hiring activity is down, for the right skillset employers are willing to raise their offers.”

Demand weakness was highlighted by marked falls in both permanent and temporary vacancies during February. However, pay pressures persisted amid competition for suitably-skilled workers.

February also showed a third consecutive monthly fall in permanent staff appointments across Scotland. This decline, as well as the quickened rate of contraction in January, was linked to fewer vacancies.

This matched the overall fall in permanent hires in the UK as a whole, but the rate of contraction in Scotland was sharper than the rest of the UK.

Temp billings also declined in Scotland, but when adjusted for seasonality, this represented only a fractional fall.

The availability of permanent staff has also fallen – February’s decline was only slightly less rapid than that seen in January.

A lack of suitably-skilled workers and economic uncertainty making people hesitant to seek out new roles has contributed to this continued trend.

In stark contrast, the availability of permanent candidates rose sharply at the UK level.

As has been the case in each month since December 2020, pay increased for permanent new joiners across Scotland during February.

The rate of salary inflation quickened to the fastest since November, after having softened to a near three-year low in January. The rise in salaries was widely attributed to shortages of suitably-skilled candidates.

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For the first time since November, the rate of salary inflation across Scotland was stronger than that seen for the UK as a whole.

Scottish recruiters signalled a fall in permanent vacancies during February, thereby extending the current run of contraction to seven months. The rate of decline moderated slightly from January, but was rapid overall and outpaced the UK-wide average.

Aside from medical and care, all of the eight monitored employment groups registered lower demand for permanent staff.

February data revealed a seventh successive monthly fall in demand for short-term staff across Scotland. The rate of contraction softened from the previous survey period but was sharp overall. Short-term vacancies across the UK as a whole meanwhile declined for the first time in three-and-a-half years, albeit only marginally.