Scottish economy stable and more positive

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The latest State of the Economy report from Scotland’s Chief Economist, which focuses on the business sector in Scotland and its contribution to the recovery, has been published.

Doctor Gary Gillespie’s report highlights that the economic outlook is more positive than this time last year thanks to a more stable economic environment.  It says that the emergence of a global recovery in 2013 will allow Scotland to embark on a more sustainable path of recovery and economic growth.

He points out that 2013 will be pivotal for businesses in Scotland and says that the relatively more stable global economic outlook could help support business confidence in Scotland. The prospect of gradually improving economic fundamentals both at home and overseas should help provide an environment that better supports investment, exports and growth.

However, the labour market has shown mixed signals in recent months and will remain challenging without robust growth returning to the economy.

The key points are

* This State of the Economy Report comes after a disappointing 2012 – a year when it had been hoped that economic fortunes would improve and momentum would finally return to the global economy.

* The economic outlook is more positive than this time last year.

* This Report focuses on the business sector as in a climate of deleveraging by both governments and households and with world trade remaining fragile, the performance of the business sector will be key.

* Therefore 2013 could be pivotal for business and recovery in Scotland.

Finance Secretary John Swinney said:

“This latest analysis suggests that the global economy will continue to improve this year and Scotland can make the most of the opportunities that will come our way as a result.

“With a more positive environment we can expect business confidence to improve and investment to increase.  The improving economic environment in our key markets could also lead to better export conditions.

“The Scottish Government is taking action to foster an enterprising spirit in our business community and we will build on this to encourage further levels of entrepreneurship. The number of businesses in Scotland is at its highest level since 2000 and we want this trend to continue.

“Our £2 million Scottish entrepreneurs fund, EDGE – Encouraging Dynamic Growth Entrepreneurs – is helping accelerate innovative business ideas and we are maintaining the most competitive business environment anywhere in the UK.  When considered together, our business rates reliefs are worth over £560 million a year to our companies.

“The recent Global Connections Survey highlighted that we are also successfully strengthening its international economic links, with Scottish exports increasing by £1.6 billion to £23.9 billion in 2011.

“The work of Scottish Development International, Scottish Enterprise and Highlands and Islands Enterprise is encouraging our companies to make the most of opportunities in emerging economies in Asia, South America, the Middle East, Africa and Eastern Europe and also in traditional areas such as US and Europe as conditions improve.

“While the State of the Economy report highlights these opportunities, it also underlines the fragility of the recovery and that is why we need the Chancellor to take the steps in next week’s budget that will help our businesses move forward and, in turn, drive growth in the economy.”