ECONOMY: THE MOST POSITIVE SIGNS IN YEARS

No fewer than three reports this morning paint a positive picture of the Scottish economy.

Lord Green Trade & Investment Minister
Lord Green
Trade & Investment Minister
Official figures from the UK government point to growing numbers of direct foreign investment in Scotland – up by 16% in the past year, slightly more than for the country as a whole. According to the Trade and Investment Minister, Lord Green, the figures are “a vote of confidence” from foreign investors, confirming that the UK remained a world-leading business destination.

“Attracting foreign investment,” he said, “is an important element of the UK government economic growth programme and UK TI will continue to work with companies to help create and sustain a globally attractive, highly competitive and truly international economy.”

John Swinney MSP Finance Secretary
John Swinney MSP
Finance Secretary
In a statement, the Scottish government said that the figures showed that the independence debate had not deterred investors. In the view of Finance Secretary, John Swinney, the report provided “welcome recognition that Scotland is out-performing UK securing inward investment. This report is the Scotland reported record numbers of FDI projects in 2012/13, which demonstrates the continued attractiveness of Scotland as a place for investment and growth as we approach the referendum.”

The second report comes from the CBI. Its latest Scottish Industrial survey reports that optimism amongst manufacturers had “turned positive” for the first time since it over last year. The volume and deliveries of exports had increased in the last three months and, looking ahead, the prospects for future orders and output had also increased. But by contrast, the number of new domestic orders had fallen for the fifth consecutive quarter.

The director of CBI Scotland, Iain McMillan, said that the results showed “a continuing trend of exports from Scotland performing fairly well. However, manufacturing industry in Scotland still faces a difficult economic environment in home markets, although the survey suggest the situation may be improving.

Iain McMillan CBI Scotland Director
Iain McMillan
CBI Scotland Director
“There is much that the government can do,” he added, “to assist manufacturers and become a more effective catalyst for growth. The UK and Scottish governments need to put growth at the very heart of their agendas and ensure that all areas of government are properly aligned towards achieving this overarching objective.”

The third report deals with the construction sector in particular – one that has been languishing in the doldrums for many years. Produced by the Royal Institution of Chartered Surveyors, it suggests that the sector may be “turning the corner” with a number of new projects beginning to rise in the level of activity “edging upwards”. In the most positive reading since early in 2008, the survey recorded an 11% rise in the number of its members reporting an increase in workload in the second quarter of this year.

RICS LogoMore significantly, surveyors across Scotland were no more positive in our outlook for the future with a third of them suggesting that the workload would continue to rise. There were clear indications that the sector’s collapse in profitability could be starting to turn round with almost a quarter of surveyors believing that the prospects for job opportunities in the sector would rise in the coming year. But in a note of caution, RICS suggested that this latest evidence was simply an indication that, across the UK, the sector was “beginning to regain some composure rather than anything even remotely close to a return to form.”