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Latest data on the Scottish economy – Update 6th November 2020

The latest data shows that businesses across most sectors of the Scottish economy are continuing to trade, but the accommodation & food services sector saw decreases in trading activity as a result of new restrictions imposed by the Scottish Government in early October.

This week Scotland entered a five-tier Coronavirus restriction system whilst England entered a month-long national lockdown. The outlook for businesses operating in industries reliant on face-to-face consumer interaction therefore remains uncertain.

The share of furloughed employees has been falling over the past few months in Scotland but accommodation & food services and arts, entertainment, and recreation still have over a third of all employees on furlough. On Wednesday Chancellor Sunak announced that the government’s furlough scheme would now be extended to March 2021 – offering 80% of a person’s wage up to £2,500.

Moreover, consumer sentiment around the economy, household finances, and spending remains at record lows and has yet to show signs of improvement.

Recently the Economics Observatory published an article on how Scotland’s economy is faring throughout the pandemic. The Observatory publishes regular articles on Coronavirus and the UK economy.

Last week we published an article on the impact of the pandemic on people living with learning disabilities.

Additionally, the latest Annual Survey of Hours and Earnings (ASHE) data for 2020 was released this week and we covered the caution required when looking at the latest figures in our article earlier this week.

Chart 1: Estimated share of businesses that are currently trading, broken down by industry, Scotland, 15th June – 18th October 2020: Businesses across most sectors of the Scottish economy are continuing to trade since reopening after the first nationwide lockdown. However, the share of businesses trading in the accommodation & food services sector fell from just under 88% in late September to 80% at the start of October – likely a result of new restrictions imposed by the Scottish Government.

Source: Scottish Government

Chart 2: Estimated share of workforce on furlough leave, broken down by industry, Scotland, 1st June – 18th October 2020: The numbers of employees on furlough has been falling across all sectors of the Scottish economy over the past few months. Despite this, in late September/early October, an estimated 43% of workers in the arts, entertainment and recreation sector and 36% of workers in the accommodation & food services sector remained on furlough.

Source: Scottish Government

Chart 3: Estimated % of workforce working remotely instead of at their normal place of work, broken down by industry, Scotland, 1st June – 18th October 2020: The share of the workforce working remotely varies considerably across sectors of the Scottish economy and has not changed much since the start of Summer. One exception is the wholesale and retail sector where the share of employees working remotely fell from around 35% in August to just over 16% in late September. Large businesses with 250+ employees had around 30% of their workforce working remotely in late September compared to only 16% of the workforce in SMEs (10 to 249 employees).

Source: Scottish Government     

Chart 4: Percentage of eligible employment furloughed, Scottish local authorities, August 2020: The share of jobs furloughed in Scotland fell from 16% in July to 10% in August. Aberdeen City had the highest share of employment furloughed (12%) as of the end of August.

Source: HMRC   

Chart 5: Value of CBILS and BBLS loans awarded per registered business, Scottish parliamentary constituencies, up to 4th October: the value of loans awarded per registered business is varied across Scotland however, the highest concentration of loans so far has been in the central belt.  Parliamentary constituencies in Glasgow had the highest value of loans awarded per registered business. Orkney, Shetlands, West Aberdeenshire, and Kincardine had the lowest value of loans awarded per registered business.

Source: House of Commons Library

Chart 6: Consumer Sentiment Indicator, Scotland. April 2019 – September 2020: Current consumer sentiment remains at historical lows but future expectations about economic developments remain positive. However, the net balance of positive responses about expectations around the economy and household finances has been falling slightly over the past few months.

Note: data for April and May are unavailable due to the face-to-face surveys not being carried out as a result of Covid-19. Indicator scores for each question are presented in the form of net balances. The net balances are calculated by subtracting the percentage of respondents that report a decline in sentiment from the percentage of respondents that report an improvement in sentiment, excluding respondents that report unchanged sentiment. In each quarter this shows whether the balance of responses is positive, negative, or balanced.

Source: Scottish Government

Chart 7: Number of vacancies across Scotland, ‘best’ and ‘worst’ performing local authorities, February 2020 to October 2020: the number of advertised vacancies in Scotland rose to over 27,000 in October however, the pace of recovery differs across local authorities. The Scottish Borders, Dumfries & Galloway, Clackmannanshire, and North Lanarkshire have all recovered to pre-Covid levels but Aberdeen City, Aberdeenshire, Midlothian, and Glasgow are only at around half of the levels of vacancies reported before the crisis.

Source: Adzuna Labour Market Stats

Chart 8: Increases in demand for certain debt-related advice as a proportion of all debt advice, Scotland, August to September 2020: The overall demand for debt-related advice has fallen between August and September. Despite this, there were certain categories of debt-related advice that saw slight increases in demand between August and September. The share of advice related to council tax arrears and unsecured personal loans saw the highest increases (0.8 and 0.6 percentage points respectively).

Source: Citizens Advice Scotland

Note on our real-term indicators analysis:

We review newly available data each fortnight and provide a regularly updated snapshot of indicators that can provide information on how the economy and household finances are changing. This allows us to monitor changes in advance of official data on the economy being released and also to capture key trends that will be missed by measures such as GDP. Each fortnight we investigate new sources from known data sources and use publicly available data.

Authors

The Fraser of Allander Institute (FAI) is a leading economy research institute based in the Department of Economics at the University of Strathclyde, Glasgow.

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