Latest Data On The Scottish Economy - Update 20th November 2020

25th November 2020

The latest data confirms that businesses across most sectors of the Scottish economy are currently trading, with tourism-facing industries continuing to be hit the hardest by the ongoing tiered lockdown system.

However, with 11 local authorities confirmed to be moving into tier 4 of the Covid lockdown restrictions, more businesses, including restaurants, cafes and non-essential retail will now be forced to close from 6pm tonight for a minimum of 3 weeks. This means tougher restrictions will be effective across most of the west of Scotland until the 11th of December.

Further to this, the 3-week lockdown for large parts of the country comes at a time where many households are already reporting deteriorated mental health, and with more people now reverting back to working from home, and some not working at all, the outlook for businesses, jobs, and wellbeing are highly uncertain.

However, the decision to extend furlough will have saved a number of jobs - two-fifths of firms were planning redundancies before the furlough extension was announced at the end of October. We discussed this and our other main findings from our Scottish Business Monitor in our podcast last week.

Last week we also published two articles on the impact of hours worked on poverty and the effects of underemployment on things like wellbeing.

While news of further restrictions feels like a step back on the path towards economic recovery, recent positive news of a Covid-19 vaccine has boosted optimism across the world. The Economics Observatory recently published an article on how stock markets responded to the vaccine update. They found that shares in firms hardest hit by the pandemic, such as oil companies and airlines like British Airways, benefitted from the news.

Chart 1: Estimated share of businesses that are currently trading, broken down by industry, Scotland, 15th June - 1st November 2020: The share of businesses in most sectors has returned to near-normal levels of trading, with the admin and support services seeing an increase on the share of trading businesses since our last update. However, the share of accommodation and food services businesses trading continues to fall, with just over 60% of businesses in this sector currently trading. Given that 11 local authorities, from 6pm tonight, will be under level 4 restrictions, the immediate outlook for this sector has worsened.

Read the full article from the Fraser of Allender Institute HERE