A “significant improvement” in the prospects of oil and gas service companies has boosted the Scottish financial and business services sector this year, according to new research.
But, with uneven performances across other sectors, Scotland’s economy remains “subdued,” the Scottish Chambers of Commerce (SCC) warned today.
Releasing the findings of its latest economic indicator survey, covering the first quarter of this year, SCC called for a “clear steer” from Holyrood and Westminster that business success is a priority.
The report highlights “very encouraging” export driven results from manufacturers. But it records negative performance in the the retail and wholesale sector and tourism compared to the same period last year and a continuing “fairly flat” outlook for construction.
Neil Amner, chair of the SCC’s economic advisory group, said: “In January, our survey warned that Scotland’s economy stood on a knife edge and these latest figures point to continued subdued performance in the early part of this year.
“However, the picture across the various sectors is less even than it was at the end of 2016, with the manufacturing sector recording very encouraging results, again driven by exports.
“The financial and business services sector has also rebounded significantly from its position at the beginning of 2016, though this is at least in part as a result of a significant improvement in the prospects of oil and gas service sector businesses from a low base.”
The research shows Scotland’s retail and wholesale sector giving its highest prediction of price rises since the third quarter of 2100, when the inflation rate was more than 5%. It also indicates declining investment trends, particularly in the tourism sector, which suffered as a result of the recent business rates evaluation.
“Uncertainty is the word that is on everyone’s lips,” Mr Amner said.
“Whether as a result of Brexit, the upcoming general election, or the prospect of a Scottish independence referendum, it is certainly a feature of business life in Scotland at the moment.
“To help businesses to deal with that and to get back to investment and job creation, we need a clear steer from our governments north and south of the border that business success is a clear priority.
“As we approach a General Election, we expect the political parties to pledge targeted tax cuts, potentially including a temporary cut in VAT, in order to bolster consumer demand.”
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