The Scottish economy is continuing to defy adverse headwinds from the eurozone and elsewhere and is showing robust growth in a number of key areas. Three separate reports released over the last few days have highlighted the strength of the Scottish economy and emphasised again that Scotland is a wealthy nation. With youth unemployment down, manufacturing exports up and tourism returning to pre-2008 levels, there are reasons for continuing optimism about Scotland’s economic prospects.
Youth Unemployment Down
The first report, released this week by the Scottish Government, revealed that youth unemployment in Scotland has fallen by 5.6% over the last year. Welcoming these figures the First Minister Alex Salmond said: “Scotland now has a higher employment rate, lower unemployment rate and lower inactivity rate for young people than the rest of the UK. Now, the number of young people unemployed in Scotland is at the lowest level for six years.
These figures also show that Scotland compares well internationally and remains among the top ten best performing countries in the European Union for youth unemployment. These statistics further reinforce the position that Scotland’s economy is going from strength to strength – last week alone we had confirmation that our GDP is increasing further beyond its pre-recession peak and employment levels are the highest since records began.”
Business for Scotland welcomes this news on lower youth unemployment. Being either employed or in education or training is especially important between the age of 16 – 24 as studies have shown that long periods of inactivity at this age can result in lower wages and increased chances of unemployment in the future.
Manufacturing exports grow
Building on this positive news, the Scottish Government also announced that manufactured export sales grew by 2.8% over the last quarter, despite a disappointing drop in food and drink exports, on an annual basis exports are up by 0.5%. This was mostly offset by strong performances from the chemical and engineering sectors. Food and drink exports have shown strong growth over the last few years (a 52% increase to £5.4 billion between 2007 and 2012) so while a drop is disappointing, it should be considered in its wider context.
International visitor numbers grow
Finally, Visit Britain also released new figures that showed the number of tourists visiting Scotland is almost back to its pre 2008 peak, with 1,118,000 visits to Scotland from overseas between January and June 2014, up 16% on the 2013 figures and just within touching distance of record highs.
Amongst the tourism figures there was even more good news, with record highs on spending from Chinese tourists (£20 million) and a 41% increase in business visits. Chinese tourists are increasingly lucrative to countries worldwide with nearly one in ten international tourists coming from China despite only 5% of its population owning passports. Scotland would do well to attract more of these tourists as they have shown an appetite for spending more than any other nationality while abroad. Sadly, Westminster’s constant antagonism towards the EU has hampered efforts to attract more Chinese tourists as the UK refuses to join Schengen and many Chinese tourists are put off visiting Scotland by the need to apply for a separate UK Visa.
It should be noted as well that these figures do not include the number of tourists from the successful Commonwealth Games, the Ryder Cup or future events this year such as the MTV Europe Music Awards that will be held in Glasgow in November. When you consider that many people may have put off a trip to Scotland to coincide with one of these major events, the figures for July to December should hopefully break previous records.
Malcolm Roughead, the CEO of Visit Scotland said: “Since 2012, development efforts have delivered over 80 new routes to Scottish airports with more and more announced year on year. In the last year alone, major inbound routes will have delivered hundreds of thousands of additional seats, bringing a remarkable number of new visitors to Scotland. The events, activity and worldwide attention in 2014 has taken Scotland’s profile and reputation to great heights and we are determined to make the most of this for the future.”
These are great figures for Scottish tourism and we would be delighted if they could be improved upon by cutting Air Passenger Duty, so that Scotland could compete with London for international flights. As the CEOs of both Ryanair and the International Airlines Group have suggested they would be open to starting new routes from Scotland if APD was cut and we believe this is a power that should certainly be devolved so that the Scottish Government can take action to boost tourism numbers further.
Business for Scotland welcomes this economic good news that highlights the enduring strength of Scotland’s economy. As we move forward with the Smith Commission and proposals for more devolution, we will continue to make the case that Scotland could grow its economy and create more jobs if it had greater control over its own economic affairs.