Scottish Chambers: Quarterly Economic Indicator Survey Results Q4 2015

Tim Allan President of the Dundee Angus Chamber of Commerce commented on the latest report:

“The latest Scottish Chambers of Commerce Quarterly Economic Indicator Survey highlights fragilities and risks in the Scottish economy that are writ large in Dundee and Angus. With Scottish economic growth lagging the rest of the UK, real and bold action needs to be taken by government to create an atmosphere for sustainable business growth. Scotland now has more control of our domestic economy than ever before and government have much more capacity than ever before to trim our sails to suit the economic weather conditions.

Whilst dropping air passenger duty is wholly welcome to ensure we operate on a level playing field as a destination for business, more action is required to create a culture and atmosphere that actively encourages entrepreneurial and enterprise activity.

The doubling of the Business Rates supplement for larger businesses and the temptation to increase tax “on the rich” using SRIT may seem like vote winners with little political or electoral pain, but the message that this sends to the business community is not wholly encouraging.

Regionally, with the rapidly falling oil price creating uncertainty over the North Sea energy sector, Dundee and Angus need support that directly stimulates the local economies and creates a positive atmosphere for business. We need better and faster transport links, connecting the Angus coast effectively with the whole of Scotland and the wider UK by road and rail - a fast link road to the booming Port of Montrose would be a start, followed by a faster and more efficient rail service between Aberdeen and Edinburgh. The long awaited off shore wind energy has been long promised by the government yet is still a long way off and its immediate economic impact would be a huge boost to the local economies of both Dundee and Angus.

My concern is that hard spending decisions need to be made by Scottish Government in order to stimulate the economy and to create a positive business atmosphere. While the government has spoken recently of encouraging links with business, what we need now is action and difficult decisions being taken and delivered if we are to see Scotland catch up economically with the rest of the UK. And Liz Cameron at Scottish Chambers is right: Scotland’s new tax powers should be used to generate competitive advantage, not to put the recovery at risk - increased taxation does not stimulate economic growth”.

SCOTTISH PARLIAMENT MUST SUPPORT COMPETITIVE BUSINESSES IN 2016

Scottish Chambers of Commerce’s Quarterly Economic Indicator engages with five of Scotland’s key business sectors: Construction, Financial and Business Services, Manufacturing, Retail & Wholesale and Tourism.

These findings, released in collaboration with the University of Strathclyde’s Fraser of Allander Institute show the position of businesses for the fourth quarter of 2015.

Liz Cameron OBE, Director and Chief Executive of Scottish Chambers of Commerce, said:

“As the Scottish economy heads into 2016, we do so on the back of a year that has been very mixed in terms of the fortunes of Scottish businesses. Our latest Economic Indicator points to continued success for many businesses but the shadow of the continued decline in global oil prices now looks to be extending beyond those businesses operating directly in the sector.

“Last year, the Scottish construction sector was one of the primary drivers of growth. This remained the case right up until the end of 2015 and despite the fact that optimism in the sector is less strong than it was a year ago, prospects for employment in the sector remain positive. However this is one of a number of sectors where businesses are facing skills shortages, with nearly two-thirds of businesses who were hiring having experienced difficulties in recruiting. Businesses are telling us that they are looking for education and skills providers to be developing the talents that industry needs. Too often an upturn in business activity is not matched by a commensurate increase in the availability of skilled workers.

“Despite a slowdown in exports, there remain some grounds for optimism for Scotland’s manufacturers, many of which recorded a broadly positive end to 2015. Both revenues and orders remained in positive territory but expectations are for investment to ease in the early part of 2016.

“Results for tourism have been more mixed, where the sector is markedly less optimistic than it was at the turn of 2015, and retail, where lower revenues and profitability may be a consequence of early and prolonged pre-Christmas discounting.

“The challenge for 2016 will be to sustain the economic recovery in Scotland and to support businesses to grow, create jobs and compete. In a year when Scotland goes to the polls to elect a new Scottish Parliament that will acquire more powers than ever over how it raises resources, it will be important to consider the impact of taxes on Scottish businesses. The Scottish Government has announced the doubling of the Business Rates supplement for larger businesses this year, whilst some politicians are also contemplating raising Income Tax rates, once more extensive tax powers are available to them. The question that our political representatives must ask themselves is whether these kind of measures will help businesses to create the kind of jobs that Scotland needs to spread wealth and prosperity and deliver the resources that Government needs to provide essential public services.

“For businesses in all sectors across Scotland, it will be important that Scotland’s new tax powers are used to generate competitive advantage, not to put the recovery at risk.”

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