Monthly Update On The Scottish Economy - August 2021

12th August 2021

From the Fraser of Allender Institute.

9th August 2021 marked Scotland's most significant reopening of the economy since the first national lockdown in March 2020.

As of today, social distancing in pubs, restaurants and shops is no longer a legal requirement. And, after being closed for over 500 days, nightclubs and music venues opened their doors last night.

However, despite Scotland lifting many of its COVID-19 restrictions, face coverings and working from home will likely be a part of everyday life until sometime next year.

As the country exits Level 0, it is important to reflect on how the Scottish economy has been performing so far this Summer.

The latest GDP figures indicate that the Scottish economy is 2.7% below pre-pandemic levels, this compares to 3.1% for the UK overall.

The performance of the accommodation and food services sector has been improving since the beginning of summer, and this is expected to continue as businesses dependent upon nightlife reopen this month.

The number of vacancies in the Scottish economy has been increasing and employment has begun to pick up in most parts of the country.

Jobs, both new and existing, will look slightly different moving forward as around a third of Scottish businesses expect to keep homeworking in some capacity in the future.

Life beyond Level 0 has been made possible due to COVID-19 vaccinations. The UK continues to perform well globally in terms of the share of the adult population that have been vaccinated. And, as of 6th August 2021, 90% of Scotland's adult population have received their first dose of the COVID-19 vaccine, and 74.6% have received both doses.

Chart 1: Scottish GDP, Feb 2020 - May 2021: Scottish GDP grew by 0.9% in May - mostly driven by the services sector - as further restrictions were eased across the country. Accommodation and food services contributed the most to growth in the services sector, and is now operating at around 70% of its pre-pandemic levels. The construction sector contracted for the second month in a row, by 0.8%, however, remains 1.1% above pre-pandemic levels.

Read the full article HERE