Further predictions of stagnation in Scotland's financial sector job market
Brace yourself: Scotland's financial services employment levels are unlikely to increase to any significant degree for at least the next four years.
This is the slightly gloomy prognosis outlined in the latest Ernst & Young Scottish Item Club report, which predicts a 'lost decade' north of the border where employment could average just 71% to 2015.
Financial services has, of course, felt its fair share of pain in Scotland. In the 12 months to September 2010, employment in the sector fell by 7,500 (or 8.2%) compared to just 1.5% in England and Wales.
The good news is that it's picked up again this year. Item Club figures suggest that numbers employed in the sector increased from 95,000 in 2010 to 99,000 this year – or a just over 4% rise year on year.
Unfortunately, this is where the positivity ends. The Item Club is predicting that net employment levels within financial services will remain static next year, increase by 1,000 in 2013…and then remain stagnant again until 2015.
"There's continued attrition in the nationalised banks, life assurance firms are operating in tough environment and, while investment operations firms continue to recruit, the large hiring announcements have subsided as international organisations feel the pressure," says Dougie Adams, senior economic advisor to the Ernst & Young Scottish ITEM Club. "There are some positives – Tesco Bank starting up for instance – but this is not enough to increase employment numbers across the sector."
Sadly, the Item Club report chimes with another recent prediction from the University of Strathclyde's Fraser Allander Institute last month, which predicted a recruitment freeze in the currently and possibly more job losses in the medium term.
Last month, Clydesdale Bank said it was cutting nearly 300 jobs in its 'financial solutions centre' for business centre in Glasgow, Standard Life unveiled around 70 redundancies as part of its ongoing cost-cutting programme and Lloyds is still in the midst of the 15,000 job cuts
announced in June.
