Scotland’s tentative economic recovery has been given a boost by the publication of two reports revealing a rise in the number of businesses and jobs being created.
However, there was a stark warning more private sector growth will be needed if the recovery is to be sustained once public sector cuts begin to kick in.
The Bank of Scotland Labour Market Barometer revealed the number of people entering full-time employment rose for the fourth consecutive month and the demand from businesses for permanent staff is at its highest for eight months.
It was revealed last week Scotland was the only part of the UK to record a fall in unemployment last month. However, Donald MacRae, chief economist at the Bank of Scotland, said unemployment will soon begin rising unless the private sector expands enough to offset looming jobs cuts in the public sector.
Meanwhile, Business Gateway, Scotland’s national business advice service, revealed a rise in the number of new firms seeking its assistance during the last three months of 2010.
Business Gateway recorded an increase of 3.7% in the number of new businesses it helped start in the last three months of 2010 compared to the same period the previous year.
The service also recorded a 27.9% increase in the number of existing firms seeking its assistance. In total, 2635 businesses started up in Scotland in the final three months of the year, up from 2542 in 2009.
The number of existing businesses contacting Business Gateway for the first time in the same period in was 1043, up from 816 in 2009. These figures bring the total number of new businesses started in Scotland this financial year, with support from Business Gateway, to 8473 up 10.5% on the same period last year.
Scottish Government enterprise minister Jim Mather said, “It is encouraging to see both an increase in new business start-ups, and Business Gateway providing its high quality support to even more existing businesses.
“With Scotland now in recovery, with employment rising and unemployment falling, it is vital we go on supporting companies across Scotland, both through Business Gateway and the whole range of initiatives in our comprehensive economic recovery plan.”
David Valentine, chairman of the Business Gateway Scotland board, said, “With over 10% more new businesses being set up with Business Gateway’s assistance so far this year and 18% more existing businesses seeking advice, these figures show that Scotland’s small and medium-sized enterprise sector continues to show a determination to succeed in these continuing uncertain economic times and that they recognise the value of working with Business Gateway.
“Business Gateway’s expert advisers and local authority economic development staff continue to work together providing Scotland’s business community with high quality business advice and training to meet the targets set down in agreement with the Business Gateway Scotland board.”