SCC Quarterly Economic Indicator: political uncertainty and cost pressures


Political uncertainty and cost pressures taking toll on Scottish economy

The latest Scottish Chambers of Commerce Quarterly Economic Indicator survey for Q4 of 2018 shows Brexit uncertainty and rising cost pressures take toll on the Scottish economy as investment slows down.

Raw material prices are cited as a leading cost pressure for construction, manufacturing, retail/wholesale and tourism, with financial & business services citing finance costs as a top concern.

The survey, produced by the Scottish Chambers of Commerce Network in collaboration with the University of Strathclyde Business School’s Fraser of Allander Institute, illustrates a broadly positive Scottish economy,

Professor Graeme Roy, Director at the University of Strathclyde’s Fraser of Allander Institute said:

"The latest results from the Scottish Chambers of Commerce Quarterly Economic Indicator show Brexit uncertainty is increasingly casting a shadow over business activity in Scotland.

 "Whilst many businesses remain relatively resilient in terms of their day-to-day activities, levels of optimism have slipped across the board. Unsurprisingly, manufacturers have become more pessimistic in their outlook as the prospects of a ‘no deal’ Brexit have risen. Indeed, confidence in the sector is at its lowest level since 2012.  The festive season did not provide Scottish retailers with much of a boost with optimism falling and cost pressures increasing.

 "Across the economy, investment intentions remain subdued, with many businesses appearing to be in ‘wait and see’ mode."

Commenting on the results, Neil Amner, Chair of the SCC Economic Advisory Group and Director of Anderson Strathern, commented:

"The results of the SCC’s latest survey reflect a challenging trading environment. It is clear from the survey results that many companies have pressed the 'pause button' as political uncertainty and increasing cost pressures take their toll on business investment and confidence.

"We are seeing future expectations dipping. Recruitment difficulties remain a persistent challenge and in any investment slowdown, businesses need practical and measured policy decisions that will enable economic growth. The survey results show the recruitment challenge is particularly pronounced in manufacturing and tourism. It is a priority for business that the UK Government ensures immigration rules make it straightforward for companies to access skills at all levels, without prohibitive costs and additional bureaucracy."

You can download a copy of this report from the Scottish Chambers of Commerce Network

Published: 8 February 2019

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