Scotland’s economic recovery to pre-recession levels of growth is “not good enough”, a leading business group said yesterday.
The Scottish Chambers of Commerce (SCC) said a slowdown since the start of the year was unsatisfactory, and called on whoever is at No 10 Downing Street after next month’s general-election to open up international opportunities, ensure a more appropriate skills mix, deliver more effective connectivity and reduce the tax burden on businesses”.
SCC’s latest Quarterly Economic Indicator report, covering five key business sectors in the first quarter of 2015, highlights a return to pre-recession levels of growth but also a recent slowdown for Scotland’s private sector.
The survey, carried out in partnership with Strathclyde University’s Fraser of Allander Institute, condenses the views of 643 firms in the construction, financial/business service, manufacturing, retail/wholesale and tourism industries.
Its findings coincide with official new figures showing Scottish gross domestic product – a measure of economic growth – increased by 0.6% during the final quarter of 2014.
SCC chief executive Liz Cameron said: “Our first economic indicator covering 2015 depicts an economy that has returned to pre-recession levels and is now on a path of slower growth.
“It is not enough to get back to where we were – that wasn’t good enough then and it isn’t good enough now. Scotland needs to up our game and our targets. Other economies have moved on and we need to catch up and overtake them
“The indicator shows that growth levels across most sectors have slowed considerably, compared with the final quarter of last year, but most indicators still remain above pre-recession levels and long-term averages and some point towards an improved performance from Scotland’s businesses going forward.
“Sales revenue and profits declined noticeably in the construction and tourism sectors and although revenues grew for financial and business services, manufacturing and retail/wholesale firms, all increased (revenues) at slower rates than in the previous quarter.
“Employment growth was also weaker than at the end of 2014 across all sectors.”
Ms Cameron added: “It is encouraging, however, that spending on investment increased in every sector.
“Alongside improved productivity, Scotland can only fuel long-term economic growth through increasing capital and labour inputs.
“If we want to encourage businesses to continue to invest and to stimulate much needed consumer demand, interest rates must not be raised above current levels – at least for the remainder of this year.
“When business is successful, Scotland is successful; and this can only be achieved through breaking down the barriers that limit the success of our businesses.
“We need governments in Edinburgh and London that will not only listen to the concerns and needs of business but also follow through on pre-election commitments.”
Urging the next UK Government to act on the priorities of Scottish firms, she said: “We need action to open up international opportunities, ensure a more appropriate skills mix, deliver more effective connectivity and reduce the tax burden on businesses.
“Scotland’s private sector is growing but we need to get the business environment right to secure its long-term success.”