Scotland’s estimated employment rate — the proportion of people aged 16 to 64 in work — was 74.6%, down 0.7 percentage points since December 2019 to February 2020 (pre-pandemic) and down 1.8 percentage points over the quarter.

Scotland’s employment rate was below the UK rate of 76%.

The estimated economic inactivity rate — the proportion of people aged 16 to 64 years who were not working and not seeking or available to work — in Scotland was 22.9%t, up 1.3 percentage points since December 2019 to February 2020 (pre-pandemic) and up 1.9 percentage points over the quarter.

Scotland’s economic inactivity rate was above the UK rate of 21%.

The Scottish Government’s Wellbeing Economy Secretary Neil Gray said: “The continued near-record unemployment rates for those aged 16 and over across Scotland and for men aged 16 and over are welcome. However, the economic outlook remains challenging, particularly with the ongoing cost-of-living crisis.

“The Scottish Government is committed to supporting more people into work – including parents, disabled people and those with health and caring responsibilities – through employability and skills support, high-quality early learning and school age childcare provision, as well as improving access to flexible working.

“We are quickly taking forward the commitments made in the National Strategy for Economic Transformation, including developing a lifetime skills offer for adults, which will ensure future support is targeted at those who need it most.

“These commitments also include the implementation of the action plans to ensure workers are equipped with the skills that employers will need in a green economy. Additionally, our strong apprenticeship programme is allowing employers to invest in their workforce.

“However, with certain industries still facing recruitment challenges, an urgent rethink of UK Government immigration policy is needed to enable increased access to the international labour and skills that Scotland needs for our economy and communities to flourish.

“With full powers over migration, Scotland could boost its workforce and tackle the recruitment challenges, many of which have been caused by the end of free movement and the hard Brexit imposed on Scotland by the UK Government.”

The UK Government’s Secretary of State for Scotland Alister Jack said: “It’s encouraging to see that the unemployment rate in Scotland remains near record lows and there’s resilience in the labour market. Global issues are still causing significant economic challenges, however.

“The UK Government is investing £3.5 billion to remove barriers to work and remains committed to halving inflation, reducing debt and growing the economy, not least through investing more than £2.2 billion in Scotland through our ambitious levelling up agenda and City and Growth Deals.”

The Fraser of Allander Institute, University of Strathclyde, said the decline in the employment rate of 1.8%-points and the increase in the rate of economic inactivity of +1.9%-points are the largest quarterly change in either measure since the current data series began in 1992.

Stuart McIntyre of the Institute said: “The significant decline in the employment rate and the associated increase in economic inactivity in the latest data for Scotland suggest that the labour market is weakening in the face of a set of pressing economic challenges.

“It’s too soon to tell where this will go next, and we’ll have to await further data to understand how these wider economic pressures will play out in the labour market, but the outlook remains concerning.

“The latest UK-wide data show that a big driver of economic inactivity continues to be sickness preventing people from participating in the labour market – and the data we have for Scotland paint a similar picture.

“This underlines the importance of considering wider societal challenges alongside economic conditions, and in particular the importance of improving population health in supporting economic progress and wellbeing.”