Scotland’s onshore GDP is estimated to have increased by 2.1% in March, with growth in many sectors of the economy despite the ongoing restrictions for some customer-facing services.
Output remained 5.4% below pre-pandemic levels in February 2020 and is 0.9% below the recent high point in October before restrictions were imposed over the winter months.
In March there was growth in each of the production, construction and services sectors, but output remained relatively subdued in many sectors while restrictions continued. Overall output in the services sector grew by 1.6%.
Output in the production sector increased by 3.0% in March, including 1.9% growth in the manufacturing subsector. Output in the construction sector is estimated to have increased by 5.7%.
The recovery or “bounce-back” should pick up steam as further restrictions on our movement continue and as the virus is controlled.
Scotland’s recovery from the coronavirus (COVID-19) pandemic will be driven by a programme to build a “modern, high-tech economy” while staying true to enduring values of fairness and compassion, First Minister Nicola Sturgeon said last week.
Outlining her priorities for Government to Parliament, she added that tackling the pandemic remained the immediate priority but people in Scotland should have the right to decide their future when the current crisis has passed.
In addition to vaccinating all adults in Scotland, the government’s plan for its first hundred days includes publishing a NHS Recovery Plan to achieve a 10% increase in inpatient, day case, and outpatient activity for those who had treatment or care postponed due to COVID-19.
Recognising the importance of economic recovery, the First Minister said that the government would continue its support for specific business sectors, such as food and tourism and establish a Rural Entrepreneur Fund to support Scotland’s rural economy.
Our view is that once economic recovery is durably underway, public finances will need to be returned to a more sustainable path and this is one of the future challenges faced by our country. The government has to choose a fine line between raising taxes to start paying down the massive borrowings but at the same time stimulate economic recovery and save jobs.
Most businesses will be focussing short term on their recovery and in the medium term on being resilient, improving profitability and growing turnover. If you think taxes will rise to fund government spending, we recommend all businesses should map out a range of scenarios with “what if” analysis to understand their available future strategies for success. For example, here is a smaller business’s “what if” scenario planning results:
Please talk to us about scenario planning – we have the tools to help you prepare for the future and set realistic and achievable targets.