DWF comments on latest Scottish labour market statistics

Ann Frances Cooney, employment expert and partner at DWF, has commented on the latest labour market figures in Scotland. I have placed the commentary below and attached an image of Ann Frances for your use.

Ann Frances Cooney says: “The estimates for the labour market in Scotland for March to May 2026 indicate that over the year, the unemployment rate increased while the economic inactivity and employment rates decreased.  While unemployment has increased over the past year, the fall in economic inactivity indicates that more people are participating in the labour market, pointing to a mixed but relatively stable picture overall for Scotland.

The headline figures for the period show the employment rate in Scotland was estimated at 74.3%, down 0.6% over the year.  By way of comparison Scotland’s employment rate was below the UK rate of 75.1%.  Scotland’s unemployment rate was 4.7%, an increase of 1.3% over the year.  Scotland’s unemployment rate was below the UK rate of 4.9%.  Taken together, the data points to a nuanced position relative to the UK, with lower unemployment providing a degree of resilience despite a more challenging employment picture.

The early seasonally adjusted estimates for June 2026 from HMRC Pay As You Earn Real Time Information indicate that median monthly pay for payrolled employees in Scotland was £2,672, an increase of 4.7% in nominal terms compared with June 2025.  This is higher than the growth in median monthly pay for the UK over the same period.  While the pace of wage growth has moderated, earnings in Scotland continue to outpace the UK average, which may help support recruitment and retention efforts in a competitive labour market.

Looking ahead, employers continue to navigate a period of significant workplace change as further provisions of the Employment Rights Act 2025 move closer to implementation. While the appointment of a new Prime Minister is not expected to alter the broad direction of travel for employment law reform, it may create some uncertainty around the pace, priorities and delivery of future policy initiatives, particularly where the question of a future Scottish independence referendum is raised once again. This will prompt businesses to keep workforce plans under close review. At the same time, enhanced worker protections and ongoing reforms to trade union rights are likely to support greater union activity and employee engagement, making proactive employee relations strategies increasingly important for both unionised and non-unionised employers.

In the west of Scotland, in particular, it will be interesting to see what impact the Commonwealth Games will have on the local economy and whether it will give employers a positive bounce with a positive effect in the longer term.”