Latest Fraser of Allander and Scottish Chambers of Commerce report
The latest Scottish Chambers of Commerce Quarterly Economic Indicator (QEI) in partnership with the University of Strathclyde Business School’s Fraser of Allander Institute survey for Q4 of 2020 has been published (January 14).
The QEI indicates that significant parts of the Scottish economy face worsening conditions due to the pandemic before restrictions are set to ease this year.
Commenting on the results, Mairi Spowage, Deputy Director of the Fraser of Allander Institute, said, “We have discussed for some months the prospect of a “K-shaped” economic recovery in Scotland. This is the idea that different sectors have been impacted very differently by the lockdown measures and have experienced divergent pathways in recovery.
“We can see from today’s survey results that hospitality and tourism in particular has been badly impacted, with further lockdown measures likely to cause more hardship for the industry. Other industries, such as construction, have been able to adapt to the restrictions they face and operate almost at full capacity, but possible announcements on further restrictions for this sector are likely to act as a new blow. The length of any new lockdown on construction will be key to the ripple effects this has for the wider economy.
“In these challenging and uncertain times, the Scottish Government will set out their budget for 2021-22 on 28th January. The backdrop to the budget will be significant uncertainty around the economic and health outlook; ongoing intergovernmental tensions on a variety of matters including funding flexibility and certainty; and of course the Scottish elections in May.
“Businesses are likely to hope for a range of measures in the form of continued government support and practical proposals to stimulate economic recovery.’’
Tim Allan, President of the Scottish Chambers of Commerce, said, “Last year was the most challenging year in living memory for many of us. In addition to the risk to health we all face as a result of Covid-19, restrictions imposed have created an ongoing recession and a jobs crisis which will likely take years to recover from.
“We were hoping 2021 would be a better year than 2020 but it seems it is always darkest before the dawn. We fear the restrictions that have been imposed to prevent the spread of the new variant of the virus will continue to destroy more jobs and businesses unless government support can ease the impact of closures and deliver an environment to enable economic recovery.
“Investment, particularly in green jobs and energy transition, will be key if the economy is going to be built back better and sustainably. For this to happen governments at all levels must be prepared to work hand in hand with the business community to attract and focus investment on where it will have the greatest impact.”
A copy of this report can be downloaded from the Scottish Chambers of Commerce Network
Published: 14 January 2021