What with welfare cuts, payday loans, food banks, escalating prices and zero-hour employment contracts it’s maybe hard to believe that things really are getting better, but an increasing number of indicators suggest that the economy is starting to pick up and that a recovery – however fragile – is under way at last.
House sales are on the rise, retail sales are picking up, there is growing consumer confidence and employers and business leaders are cautiously optimistic that the worst is now behind us.
Scotland’s economy is “gaining momentum”, according to a new report published yesterday. The latest State of the Economy report provides an analysis of recent economic developments in Scotland and the wider global economy. The report also looks at recent labour productivity trends in Scotland.
The report highlights improvements in both output growth and employment in Scotland’s economy over the last year. Chief Economist Dr Gary Gillespie describes a more positive environment for Scotland and its key trading partners, which can support a more sustained pick-up in investment, exports and growth.
Key points in the report include:
- Growing signs of a global recovery starting to take root in 2013, especially when compared to a disappointing 2012.
- Over the year, Scotland has seen growth in output and a general improvement in all headline labour market indicators.
- In contrast to the UK where productivity measures have fallen during the recession, output per hour worked (the key measure of labour productivity) in Scotland has risen and is now approximately 3.5% above pre-recession levels.
- A permanent improvement in productivity in Scotland would allow for potentially stronger growth in Scotland once demand returns to previous levels. This growth in output will be required to see a sustained recovery in the labour market, particularly in full-time employment, and to support improvement in real wages.
- Recent output growth and analysis of the underlying nature of the recession in Scotland suggest the potential for Scotland’s recovery to take hold throughout 2013, with a return to pre-recession levels in 2014 across the economy as a whole.
Commenting on the report Finance Secretary John Swinney said:
“Though headwinds still remain, the general outlook for Scotland is of an improving picture through 2013 with the recovery strengthening in 2014.
“Recent economic indicators have seen Scotland outperforming the UK both in terms of output and with higher rates of employment and lower rates of unemployment and inactivity. The most recent GDP data shows that the Scottish economy grew by 1.2 per cent over the year to Q1 2013 compared to 0.3 per cent in the UK.
“Today’s report confirms these positive trends. This analysis suggests that the global economic outlook will continue to improve this year and Scotland can make the most of the opportunities that will come our way as a result.
“Particularly encouraging is the recovery in productivity which is now above pre-recession levels, which if sustained should lead to a further improvement in both output and the labour market.”
Unsurprisingly Mr Swinney believes that independence would ensure a stronger Scottish economy. He went on:
“While the State of the Economy report highlights the opportunities for Scotland, it also underlines the fragility of the recovery across the UK. We will continue to press the UK Government to take action to help our businesses move forward and, in turn, drive growth in the economy.
“With the full economic levers of independence we could do more to put Scotland more securely on the road to recovery.”
Is the future looking brighter? Do you feel more optimistic?
Let us know!
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