Scottish economy suffers worst attrition of jobs since the height of the financial crisis
A NEW REPORT by Strathclyde University’s Fraser of Alander Institute (FII) economic unit has found that the Scottish economy is on the verge of re-entering recession.
The FAI report revised down its GDP growth projection for 2015 from 1.9 per cent to 1.4 percent in light of a worsening economic picture driven by the crisis in the North Sea oil industry and by weakening investment, household demand and a faltering housing market.
The report found that Scotland’s economy is becoming increasingly unbalanced, with services the only thing keeping Scotland in positive growth in the latter part of 2015 as manufacturing continues extremely low rates of growth, only just recovering from recession in the first half of 2015.
STUC General Secretary Grahame Smith said: “It can no longer be denied that 2016 is turning into a wretched year for the Scottish labour market. The small fall in unemployment must not be used to disguise the very significant fall in employment and concomitant rise in economic inactivity. Only Scotland among the nations and regions of the UK has seen its employment rate fall over the past year and its unemployment rate flat-line.
“The proximate cause of Scotland’s relatively poor performance appears to be the severe downturn in the oil and gas industry. However, this is in danger of being seriously compounded by the uncertainty caused by the European referendum. In these circumstances it is essential that Government at all levels redoubles efforts to boost employment growth.”
At least 10,000 jobs have been lost in Scotland’s North Sea Oil industry in the last year.
The news comes after a report by the Resolution Foundation found that the Scottish economy was operating with 49,000 fewer jobs than at its pre-recession peak in 2008, meaning that Scotland is performing worse than the UK in terms of jobs creation.
The news comes after UK Chancellor George Osborne warned that deeper cuts would be necessary in the event of Britain voting Out in the UK’s referendum on EU membership on 23 June.
Picture courtesy of Jo Christian Oterhals
Check out what people are saying about how important CommonSpace is. Pledge your support today.