Scottish Economy “Thriving” But Employment Makes Modest Decline

August 10, 2015

The Scottish economy is thriving despite challenging economic conditions in many other parts of the world and a persistent degree of turmoil in the euro zone.

Overall output among companies from Scotland increased over the summer in the period after the general election saw David Cameron’s Conservative Party win a majority in the House of Commons at Westminster.

“Political certainty has bolstered short-term business confidence,” said Martin Gill, from BDO Scotland. “The result is a thriving economy, despite global economic unrest.”

However, there have been suggestions that the positivity currently buoying the Scottish economy should be tempered by the fact that a strengthening pound against the euro will make it difficult for exporters to continue increasing their outputs.

Plus, there was some less optimistic economic news to emerge from the latest assessments, with overall employment levels having declined for the first time in several years during July 2015.

According to the Bank of Scotland, there was a growth in activity among companies involved in both the manufacturing and service sectors of the Scottish economy last month. However, private companies cut their staffing levels overall for the first time since October 2011, with job losses attributed primarily to downsizing among service sector businesses.

Although, the “rate at which workforce numbers were reduced was modest,” with Scottish companies in many cases linking “job cuts to internal restructuring efforts”.

Donald McCrae, chief economist with the Bank of Scotland, said in a statement that “moderate growth is expected for the rest of 2015” when it comes to employment levels around the country.

Martin Gill from BDO suggested that while there is much to feel positive about when it comes to the Scottish economy, it is important that manufacturing companies in particular are cautious in their optimism for the coming months and quarters.

“We can’t let confidence tip over into complacency; keeping us competitive should be a government priority,” he said.

At the level of personal finances and debt management, Scotland has seemingly seen some significant improvements of late, with personal insolvency levels now lower than at any stage since 2000, according to the Accountant in Bankruptcy’s latest figures on the subject.