Strong exports growth contributes to Scotland’s continuing economic recovery

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By Russell Bruce

Figures just published for the quarter June to August show both the production and services sectors in Scotland are achieving solid success in export markets in a continuing period of global market challenges.

Production businesses reported 31% growth and the Service sector 41% increased export activity.  Overall 37% of Scottish businesses reported increased export activity, 47% reported exports at the same level as the previous quarter and just 16% reported export activity had declined.

This excellent result in export activity is indicative of the innovative and adaptive strategies Scottish businesses are adopting to succeed in tough and highly competitive conditions.

I have referred to this in reports on labour market statistics.  Other commentators have also referred to the rapid shedding of labour in Scotland as the global recession sent tsunami surges into the heart of world markets.

Hard though that might have been for individuals affected at the time, it was that swift response that left Scottish businesses stronger, more resilient and hungry to use their competitive advantage to gain a larger share of diminishing markets.

And that is much of the reason why Scotland has the lowest unemployment rate of all the UK nations. The average level of unemployment in the EU is 9.6%, which is also the level of unemployment in London.  Well above the 7.5% in Scotland.

Now I was not planning to mention the CPPR again but a rather strange article by Alf Young in the Scotsman on Saturday left me bemused.  He recounted how Gordon Brown had announced a £40bn boost to the health budget over three years.  To arrive at this figure Gordon Brown had added each of the three years up cumulatively.

Alf Young wrote:

“That first year increase can’t suddenly be switched to a different spending priority in year two. Or in year three. So Brown’s double and treble counting to generate the biggest possible headline figure was a con. And I said so. Repeatedly.”

Right, so double and treble accounting is a con and we have Alf Young’s word on that, or do we?  Mr Young goes on to argue that revenue calculations are different from spending calculations so what the CPPR did was valid!

I am not questioning the right of others and the media to question and probe the figures in the Spending Review but the length of time and the column inches devoted to the business rates topic is out of proportion and one of continuing distortion.

The real concern is the damage this prolonged inquisition may be having to business confidence at a time when economic confidence is vulnerable to every rumor and innuendo.  Whichever way the opposition and the media choose to interpret the figures in the Spending Review, business rates in Scotland remain competitive with those in England.

At this point I should perhaps point out one section of the economy that is not doing well.  Print sales of much of Scotland’s previous quality press are tumbling fast.  Shares in Johnston Press, owners of the Scotsman and a host of weekly papers closed on Friday at 4.79p, barely a tenth of their value in September 2009.  They look ripe for takeover and dismemberment.

Which brings me back to the Lloyds TSB Business Monitor report because the UK home market is showing signs of potential stagnation under Westminster’s austerity plan.

Scotland is continuing to emerge from the depths of the recession but longer term business confidence is showing signs of slippage.

Attacks on the SNP Government, widely recognised as having managed the economy well within their very limited economic powers and reduced block grant allocation, are misdirected.

A bit more understanding is needed that common cause across the political spectrum, where that can be achieved, is in Scotland’s interest and will aid economic recovery.

Here is what Donald MacRae, chief economist, Lloyds TSB Scotland said: “This latest Business Monitor suggests the private sector of the Scottish economy showed marginal growth in the first eight months of the year.

“There is no definite sign of a lapse into a “double dip” but every indication of a protracted, slow and moderate recovery with the possibility of a fall in output in some quarters.

“In the face of slowing global demand, falling business and consumer confidence in the UK and cuts in government spending, the Scottish economy is showing resilience. Prospects for more robust growth remain muted. A more vigorous recovery awaits an uplift in both consumer and business confidence.”

A clear, focused and responsible opposition is critical to the function of a modern democracy as is finding common cause to serve our national interests and the people of Scotland.

Those elected to the Scottish Parliament are there to serve Scotland’s interests not those of another parliament elsewhere where some would seem to prefer to be.