A dramatic improvement in the construction sector and an anticipated tourism uplift from the Commonwealth Games and Ryder Cup has boosted confidence over Scotland’s economic recovery.
Published today, the Scottish Chambers of Commerce’s latest business survey covering the fourth quarter of 2013 found confidence across all sectors had strengthened from a year earlier.
It follows official confirmation yesterday that Scotland’s gross domestic product (GDP) grew by 0.7% in the third quarter of the year, the sixth consecutive period of progress for the economy north of the border.
The Scottish Government figures showed 0.7% improvements in the construction and all-important services sector in Q3, with production output moving 0.6% ahead.
The latest SCC study, conducted in conjunction with the Fraser of Allander Institute economic thinktank, said progress was being made in returning the economy to pre-recession levels and firms now believed the worst of the downturn was now past.
However, the business body warned the recovery remained fragile and said action on business rates and other economic measures was required in order to ensure ground was not lost in the months ahead.
“The good news is that businesses across a range of sectors are more confident at the start of 2014 than they were a year ago and the construction sector in particular has recovered dramatically after many years of decline,” Garry Clark, SCC’s head of policy and public affairs said.
“In manufacturing, orders from within the UK have strengthened, even though trends in export orders have proved to be less strong, and the outlook remains positive across the board.
“One area of potential concern is the low cashflow that some manufacturers are reporting.
“This makes it even more important that businesses have access to finance in order to fund investment for growth. This is particularly true for small and medium businesses, since investment levels will require to grow if the recovery is to become more broadly based and sustainable.
“At the beginning of the Year of Homecoming, optimism is also high in the Scottish tourism sector, following a strong end to 2013.”
“Though expectations for the beginning of 2014 are modest, occupancy levels are higher than they were a year ago and bar and restaurant trade is improving.
“Overall, tourism optimism is at an eight year high and with iconic events such as the Ryder Cup, Commonwealth Games and MTV Europe Music Awards coming to Scotland this year, there is every opportunity to succeed and to ensure that the legacy is fully realised.”
Reacting to the Q3 GDP statistics, Finance Secretary John Swinney said the recovery was accelerating despite “continuing economic challenges.”
“It is positive to see that progress has been made in our three major sectors with construction, production and services industries all posting growth,” Mr Swinney said.
“The increase in continued growth in these sectors ensures that we can continue to help build sustainable economic growth for Scotland which will strengthen our economy and create jobs.
“Today’s strong growth figures follow recent labour market statistics which show that Scotland is outperforming the UK as a whole on unemployment and employment rates. 2013 has seen improvements in both output and the labour market.”
Secretary of State for Scotland Alistair Carmichael said: “The UK’s economic growth is now stronger than the main economies in Europe, the deficit is falling and jobs are being created.
“The UK Government continues to work hard to create a stable platform for sustained growth in our economy benefiting businesses and individuals across Scotland.”