The latest Economic Commentary from the Fraser of Allander Institute, sponsored by PricewaterhouseCoopers, was published on November 17 stimulating much media interest, and prompting questions on the floor of the House of Commons and the Scottish Parliament.
The Commentary notes that Scotland and the UK are lagging behind as the rest of Europe, Japan and the United States start to recover from recession.
The UK remained in recession in the third quarter and it seems likely that will be the outcome for Scotland too. Consumer spending remains weak, which is in part a consequence of the internationally high levels of debt held by UK households before the recession and the impact of falling asset prices and bank lending restrictions.
However, in the UK a wide range of indicators suggest that a recovery is now underway. There is a widespread expectation that the UK economy will come out of recession in the fourth quarter of this year exhibiting a small but positive growth rate.
The situation in Scotland is more difficult to call. Indications of recovery are weaker here than in many other UK regions. The Commentary expects Scotland to emerge from recession this quarter, with likely growth around +0.2%, but less strongly than the rest of UK. There is a chance that the recession will not end in Scotland in the fourth quarter even though it does so in the UK economy as a whole.
The Institute is forecasting a significant output fall of -5% in 2009 but a stronger recovery in 2010 and 2011 as growth in the world economy picks up more rapidly. With forecast growth of 0.1%, in 2010, 1.1% in 2011 and 1.6% in 2012, growth in the Scottish economy is expected to remain below its trend of just below 2% for some time.
The Commentary team of Grant Allan, Professor Brian Ashcroft, Cliff Lockyer, Eleanor Malloy and Isobel Sheppard, were delighted at the media coverage, which ranged from the Financial Times to the Whitby Gazette.
Articles drawing on the research of Business School colleagues Stewart Dunlop, Dr Karen Turner, and Professor Robert Wright and Irene Mosca, on, respectively, the defence industry in Scotland, energy efficiency and devolved immigration policy completed the Commentary package.
For more information see http://www.strath.ac.uk/frasercommentary/