Scotland in 2010 has 'Brighter Prospects'

03 January 10

A prediction of brighter prospects for the Scottish economy in 2010 was made today by Finanace Secretary John Swinney but he also warned ongoing investment would be crucial to secure a strong recovery from recession.

Mr Swinney gave his verdict ahead of the Scottish Parliament returning and with the Budget Bill 2010-11 due to be introduced in mid January.

He said:

"We are now starting to see the early signs of recovery in the Scottish economy and there are reasons to be optimistic for the coming year."

"Financial markets have stabilised and fears of a re-intensification of the financial crisis have receded."

"Conditions in the Scottish economy have improved in the second half of 2009, with evidence that growth has returned to parts of the economy. And recently published ONS headline GVA figures show Scotland actually outgrew the UK in 2007-08.

"Recent business surveys have also been markedly more positive. The Markit PMI survey reports that Scottish private sector output has expanded for five consecutive months up to the end of November 2009, and the CBI Scotland Industrial Trends survey signalled an increase in output in the Scottish manufacturing sector over Q3 2009.

"Over the course of the recession, Scotland's position on employment, economic activity and unemployment rates has been better than the UK and many other advanced economies. Indeed, Scotland's position on employment rates, economic activity, and unemployment rates has been better than the UK in each of the 30 months since May 2007. Between May 2003 and April 2007, Scotland was better placed on all three measures in just 10 out of the 48 months.

"The latest figures showed that unemployment in Scotland fell by 2,000 - the first decline since the summer of 2008 - while unemployment across the UK increased by 21,000.

"It is also encouraging that employment levels in Scotland have started to recover, with an additional 15,000 people in Scotland in employment compared to the previous three month period. In fact the growth in working age employment in Scotland accounts for 50 per cent of total working age employment growth across the UK.

"These are welcome signs of the current strengths of the Scottish economy that point towards a better 2010 and potential economic recovery. But uncertainty over the nature and strength of that recovery remain and there is absolutely no scope for even the slightest complacency.

"That is why I will present a draft budget later this month that goes on investing in our comprehensive economic recovery plan and in frontline services in the face of the first cut in our budget since devolution. I am absolutely committed to working with Parliament to deliver the budget and support economic recovery.

"I hope that aim will be shared on a cross party basis, recognising that supporting the economy in the coming months is essential if the recovery is to be sustainable.

"While signs of recovery are fragile, all G7 countries - with the exception of the UK - agree that withdrawing the current stimulus measures at this moment is precisely the wrong thing to do.

"The Chancellor's decision to ignore our calls for further capital acceleration puts jobs in jeopardy. I urge him to change his mind and allow us to inject this vital spending into our budget and go even further than we plan to already.

"The Scottish Government, through its economic recovery plan, will continue to support businesses and communities across Scotland and ensure that the Scottish economy emerges from the recession in a strong position to seize the opportunities created as the global economy recovers."

Source: The Scottish Government