1. Scotland’s labour market What can we learn from the past and what do we know about the future? Lorraine Wilson

2. What can we learn from previous recessions? Evidence from three previous downturns in the UK – 1970s, 1980s, 1990s No two recessions are the same All previous recessions have ended with an upswing Industrial structure of the economy tends to differ following downturn Labour market takes longer to recover than the economy more generally

3. What’s coming in the future? No one knows for sure! But we can use evidence from independent economic forecasters, business surveys, notified vacancies and previous recessions to piece together a picture

4. Evidence from economic forecasters ITEM Club (Nov 08) Fraser of Allander (Jan 09)Experian (Nov 08) Claimant Count ILO Unemployment Claimant Count Unemployment ILO Unemployment Claimant Count 20082.7%5.1%2.9%4.7%2.7% 20094.1%6.9%3.9%6.7%3.4% 20104.4%7.9%4.3%7.4%4.5% 20114.1%7.9%4.3%6.9%4.5% 20123.5%7.5%4.1%6.1%3.9%

5. Evidence from business surveys The bad news… Employment falling across a range of sectors Recruitment levels falling Business confidence is low and expectation is of further job losses The good news…? Some large firms continuing to recruit Indications of a slight increase in employment in manufacturing during Q4 2008 Employment not falling as faster as other parts of UK

6. Evidence from notified vacancies

7. Evidence on those most likely to be affected by unemployment Some groups are more likely to flow into unemployment or economic inactivity than others The youngest (16-24) and the oldest (55+) in the labour market Those with low levels of education Part-time workers

8. Summary – what can we say about the future? Its difficult to say for certain which sectors, areas or people will be affected But we do know that the labour market will take longer to recover than the economy Some sectors – finance, construction, retail, manufacturing – are expected to be affected more than others Some groups – younger people, older workers, females – are likely to affected to a greater extent However, evidence from the official statistics is mixed