The Scottish economy showed only weak signs of recovery where a return to trading was allowed as COVID-19 restrictions eased over the summer, according to the Scottish Chambers of Commerce (SCC) Quarterly Economic Indicator (QEI).
The outlook remains grim in all sectors, particularly for businesses in retail and tourism, which have been hit hard by restrictions and face a bleak winter as business support and confidence plummets.
Key highlights:
- On business confidence: Signs of fragile confidence emerged in some areas of business although this was compared to historic lows from the previous quarter when lockdown conditions prevailed. Trends remain significantly negative across most indicators when compared to pre-COVID-19 conditions.
- On employment: Employment levels remain on negative trends across all sectors while risk remains that unemployment is set to rise significantly due to continued restrictions and reduction in employee support.
- On sales and revenue: Around a third of construction and manufacturing, four in ten retailers and more than half of tourism firms anticipate a further reduction in sales in Q4.
- On business concerns and cost pressures: The number of financial and business services companies reporting concern about rising taxation is the highest on record for the survey.
Tim Allan, President of the Scottish Chambers of Commerce, said: “This latest survey shows how fragile some parts of the economy in Scotland remain during this crisis.
“It makes sense that there would be some improvement compared to the previous quarter when significant parts of the economy were in an almost unprecedented shut down. But this winter brings significant risks for business, including further lockdowns and a decline in government support.
“Now is not the time to cut lifeline support. We expect joblessness to continue to rise, hitting hard from the start of November. There’s an urgent need to bridge the skills gap between those who have lost their jobs to those employers that are still recruiting. Plans to develop and support training and retraining in areas such as digital and low carbon technologies will need to be implemented if we are going to build back better.
“Many sectors are showing increased worry about the risk of increased taxation. Coronavirus interventions represent a huge burden on the public finances, but we must ensure that business recovery is not strangled to repair them.”
Commenting on the results, Professor Graeme Roy, Director at the University of Strathclyde’s Fraser of Allander Institute, said:
“This latest Scottish Chambers of Commerce QEI survey shows that we are far from being out of the woods just yet.
“Businesses’ outlook on the economic environment in Q3, coupled with levels of activity in the wider economy, remain much more negative than where they were at the start of the year. This comes on the back of one of the worst quarters for business confidence ever recorded in this survey.
“The unprecedented government support – including bounce-back loans and the furlough scheme – has enabled many businesses to hang on over the summer. But as this support is wound down, many businesses will no longer be able to postpone the hardest of decisions.
“Aside from the impact of the restrictions themselves, the stop-start nature of our progress through this crisis is adding to the uncertainty and imposing its own additional cost on businesses. For some parts of our economy, where forward planning and advance bookings are key, this poses particularly serious challenges.
“There is an urgent need for government support.”
On Covid-19 restrictions and lockdowns, Tim Allan said:
“It is unviable to keep switching the lights of the economy on and off. It risks not just jobs but the wellbeing of entire communities and the security of entire sectors.
“Instead, we must focus on using the evidence at hand to target problem areas. We have seen how Test and Protect and better data means we are in a much different place than we were at the start of the pandemic. The data the Scottish Government now has is more sophisticated and detailed and will show which environments and geographical areas the virus is spreading, allowing for a more targeted approach.”
On the tourism sector, Tim Allan said:
“Tourism businesses are some of the hardest hit and many face ruin without intervention. Despite some elements of the sector having been allowed to reopen, expectations in this sector are the lowest in the survey. Capacity constraints and household and group socialising limits have added to their struggle to recover. Nor was domestic tourism a panacea, as almost 70% reported a fall compared to the third quarter last year. There is currently no sign of overseas guests returning.
“The Scottish & UK Government must provide immediate support to the sector if Covid-19 related restrictions continue to limit the sector’s ability to trade. The job support scheme recently announced by the Chancellor, whilst welcome, does not go far enough to save jobs in this sector. We need to see a dedicated package of support for the sector including business rates & VAT holidays extension and grants relief.”
On retail, Tim Allan said:
“The coronavirus pandemic has resulted in significant disruption to the retail sector with the effects differing greatly between ‘brick-and-mortar’ and online shops and smaller versus larger retailers. The mitigation measures taken to slow the pandemic have directly affected the daily operations of the retail sector. This sector is not improving as quickly as could have been expected when shops were allowed to reopen. Negative outlook in terms of sales, investment and hiring for the key pre-Christmas period suggests they are not expecting much festive cheer to be ringing the tills.
“We have raised our deep concern over the decision by the Treasury to end the tax-free shopping scheme. This is a £5.6 billion hit on the UK economy, even before accounting for the negative knock-on effect on wide international tourism spend. This decision must be reversed by the Chancellor immediately.”
On the construction sector, Tim Allan said:
“Negative sentiment has eased for some firms in the sector as many were able to get back on site during the period, though 44% reported a further decline in confidence. It is worrying that 44% expect a fall in investment and 35% a fall in sales over the next quarter. In general, outlook for Q4 remains downbeat and concern over impact of potential tax rises is becoming an increasing worry.
“We would ask the UK Government to scrap the reverse VAT charge altogether or at minimum, delay its implementation date for a further 12 months.”
On the financial and business services sector, Tim Allan said:
“More financial and business services firms expect to return to sales growth in the final quarter of the year making this the least negative sector of the survey. The number of companies in this sector reporting concern about rising taxation is the highest on record for the survey.
“Office-based businesses in this sector are ready to start supporting the rejuvenation of city centres devastated by the lockdown. We expect the Scottish Government to provide an implementation timeline of our recently submitted report calling for the phased re-opening of remaining offices to support the economy and employee wellbeing.”
On manufacturing, Tim Allan said:
“Companies in the manufacturing sector were faring slightly better when they were able to trade compared to the previous quarter when many were shut down. Nevertheless, total new orders and sales declined for almost half of manufacturing firms in the survey during the three months to the end of September. To support manufacturing companies to increase capacity, we urge the Scottish Government to amend the physical distancing for manufacturers from 2m to 1m with mitigations.”
Trudy Morris, Chief Executive, Caithness Chamber of Commerce, said:
“The latest Quarterly Economic Indicator results should send a clear message to government at both Holyrood and Westminster of the level of support for business that is still required as we enter the winter months.
“While we have seen some positive movement over the summer in the hospitality and tourism sector, the latest restrictions announced by the First Minister are likely to prove devastating unless significant support is provided quickly to all businesses which are affected or which remain unable to open.
“There are some positive signs of recovery and growth in the North Highlands, for example with Ashley Ann in Wick announcing significant expansion and recruitment plans. There are also upcoming opportunities in the region in areas like offshore wind and aerospace.
“Both UK and Scottish Governments need to monitor the situation over the winter closely and in regular consultation with business. This will ensure they are ready to act to support those who are struggling, and help develop new opportunities as and when these arise.”
To view the latest Q3 Quarterly Economic Indicator report, click here.
Following the announcement by the First Minister of new measures restricting hospitality sector businesses to prevent the spread of Covid-19 in Scotland, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
On restrictions to pubs, bars, restaurants and cafes, Liz Cameron, said:
“These measures will sound the death knell for businesses across the hospitality sector, especially pubs and bars. Restaurants and hotels, whilst remaining open, will also be constrained on what they can provide and this will place a large dent in their already reduced income.
“Closures and restrictions will severely tamp down any signs of life in our town centres, particularly in the central belt health board areas, which have already been devastated by offices still remaining closed, cancellation of Christmas markets and other major events.
“Whilst the stay local message may align with public health messaging, it will impact nationwide support for hospitality businesses during the October holiday period. The knock-on impact will mean tough decisions including the risk of potentially more redundancies.”
On business engagement and consultation, Liz Cameron continued:
“A complete and utter lack of consultation with business only serves to compound the blows of these restrictions.
“In the vast majority of cases, the recent growth and spread of the virus is not coming from business-managed environments. In most instances, employers are playing an effective and deeply engaged role in the fight against the spread of the virus.
“We simply cannot continue to keep switching the lights of the economy on and off. Where is the plan to show that this action will stop the spread and where is the plan to manage working and living with the risks of this pandemic in the medium term are questions businesses are asking.”
On funding support for businesses, Liz Cameron, said:
“We now need to see firm commitment from the UK Government as to what immediate support is going to be available to support businesses recovery. The funding package announced by the Scottish Government is long overdue, but welcome nonetheless. We will look closely at the detail of these packages but we fear they will not be enough to avoid the worst of consequences for the Scottish economy.
“We also need to ensure those businesses that have not been able to reopen yet such as soft play are also able to access this lifeline support.”
Responding to the latest update of the route map for Scotland through and out of lockdown restrictions, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce said:
“The guidance and rules on preventing the spread of the virus must be followed; we simply cannot afford further lockdowns or any further rolling ‘circuit-breaker’ restrictions.
“The reality is that thousands of businesses are about to go under, particularly those operating soft play facilities and in our world-class culture and events sectors.
“These businesses are bitterly disappointed that breakouts that have not stemmed from their operations mean they now must remain closed for longer and potentially face ruin. The Scottish Government must move quickly to deliver the necessary financial support to save jobs and livelihoods in these sectors immediately.
“Meanwhile office-based businesses have followed and often exceeded every piece of guidance and health and safety regulation when it comes to making their premises Covid safe. All are ready to start breathing life back into our moribund city centres.
“Business, trade unions and the Scottish Government have worked together over the last three weeks on a set of clear recommendations and actions driven by health and economic data which shows that a managed reopening of our offices – for those who wish to reopen – can happen safely. We expect this plan to be positively considered and actioned, before the next review of the route map.”
Young people at school are the winners as a result of discussions between High Life Highland and The Highland Council that will see the Charity’s staff phased back into schools after the October break.
Speaking about the arrangement, High Life Highland Chairman, Ian Ross said, “I am delighted that once again our partnership working arrangements with colleagues in The Highland Council mean that High Life Highland staff will be able to recommence their work with young people during the school day and within school buildings.
“High Life Highland has always fully supported and accepted that the Council’s priorities were the safety of pupils and getting them back into full-time education. However, this new agreement will see some of our music instructors, youth workers and active school coordinators returning to school buildings where they will working with the pupils and support Head Teachers and other school staff.
The Charity Chair continued, “In order to fully comply with Scottish Government guidelines, there will still be some restrictions in terms of the types of instruments that can be used during music tuition, as well as the ‘coming and going’ of HLH staff from school grounds. However, there is no doubt this is a move in the right direction and will see our staff being able to re-engage with pupils and young people.”
Highland Councillor, John Finlayson, Chair of the Education Committee commented, “It is great to see the positive outcomes that can be reached by partnership working.
“I understand that HLH staff re-accessing schools will see the phased return of active school coordinators; music instructors; school library staff and youth workers.
“The current pandemic can be challenging for everyone in our communities, not just adults. It is vitally important, now more than ever, that our children and young people in schools are supported through these times.
“Getting school pupils back to face-to-face music tuition with the instructors; participating in outdoor activities organised by the active school’s team or receiving personal pastoral support and advice by the HLH youth team can only enhance the experiences already being offered by Head Teachers and their staff.
“I am extremely pleased that we have been able to put measures in place that will see the see Highland pupils’ school-day experience, outside of the classroom take another step towards some level of normality.”
Ian Ross, Chairman of the Highland Charity concluded, “We will continue to work with the Elected Members and Officials of Highland Council to build on the existing arrangements and move towards the reintroduction of the full range of HLH services across school and community facilities.
“We are extremely proud of the work we undertake with children and young people across the Highlands. Thanks to the arrangements being put in place by The Highland Council after the October break, HLH can resume its role in supporting young people in schools and communities across the Highlands at a time when it is most needed.”
The partnership arrangement will see HLH and The Highland Council working towards the next phase of introducing other wind instruments, singing tuition and community libraries to schools, in line with the Scottish Government guidelines.
Home-Start prides itself on the unique offer of volunteers providing one-to-one home visiting support for families and children. Since the beginning of the COVID-19 outbreak, Home-Starts have been unable to offer this face-to-face support in people’s homes.
Home-Starts acted quickly to adapt services to provide support to families over the past six months – whether that is over the phone, video calls, or group chats. Home-Starts have also provided thousands of families with deliveries of essential supplies, doorstep visits and activity packs to keep children entertained.
However, there will be occasions where digital methods may not have been enough to engage families. There may be concerns about the mental health, wellbeing or isolation of a parent that warrant different approaches. There may be vulnerabilities or concerns in the household that a physical meeting might help identify.
As restrictions are lifted it is becoming possible to restart those face-to-face visits, in a safe and secure way for families and volunteers.
Home-Start UK has been working with local Home-Starts, national directors and our insurers and have now released guidance to enable local Home-Starts to safely return to face-to-face services if they wish to.
The decision to re-initiate any face-to-face family support services (whether home visiting or group work) remains one that must be taken by each individual Home-Start, and families and volunteers should contact their local Home-Start for details of the support that they are able to offer.
Whether it is face-to-face or remote Home-Starts are all committed to making sure families are supported through the challenges they face.
Imenco are happy to announce that they have been picked as one of the finalists in the Northern Star Business Award, Aberdeen & Grampian Chamber of Commerce’s celebration of business success across the region.
We are nominated as one of four finalists in the Inspiration from Innovation category.
Open to both members and non-members of the Chamber, the Awards recognise the exceptional accomplishments of organisations across a range of fields from innovation, marketing and sustainability to people development and international growth.
This year saw a record 130 nominations submitted for the 12 categories.
The finalists in the categories are:
- Business of the Year
- Aberdeen International Airport
- Goldstar Cleaning Services
- Infinity Partnership
- Motive Offshore Group
- Customer First
- Arrowdawn
- Grace May
- Infinity Partnership
- Nimbus Blue
- Stompers Childcare Services
- Driving Sustainability (sponsored by Circular North-east)
- Glulam Solutions
- Keenan Recycling
- Legasea
- Wood Recyclability
- Family Business (sponsored by Aberdeenshire Council)
- Dalriada Luxury Lodges
- Greenwell Equipment
- Marshall Farms
- The Knowes Hotel and Restaurant
- Going Global (sponsored by Aberdeen International Airport)
- EnerQuip
- Fifth Ring
- James Fisher Offshore
- Load Monitoring Systems
- Inspiration from Innovation
- AISUS Offshore
- Ecosse IP
- Imenco
- Xergy Group
- Inspiring Futures (sponsored by DYW North East)
- Aberlour Futures Aberdeen
- Bon Accord Care
- Grampian Training Services
- University of Aberdeen Business School
- Making the Difference (sponsored by Balmoral Group)
- Charlie House
- Denis Law Legacy Trust
- NESS
- Sport Aberdeen
- Marketing Magic
- Aberdeen City Council – Aberdeen Art Gallery & Museum
- BIG Partnership and Aberdeen Football Club
- Charlie House
- University of Aberdeen
- Rising Star (sponsored by University of Aberdeen Business School)
- Cumming and Co
- Hudsons Catering
- Nucore Group
- Taxassist
- Staff Matter (sponsored by Spirit Energy)
- Brimmond Group
- Hutcheon Mearns
- Taxassist
- Texo Group
- Student Placement (sponsored by Robert Gordon University)
- BW Offshore
- Kirkburn Court Care Home
- NHS Grampian
- TAQA
The 2021 ceremony will also see a new award introduced, the Regional Contribution Award. The nominees for this award will be announced shortly.
Seona Shand, the Chamber’s membership and events director, said: “This has been a very difficult year for many businesses so it has been an inspiring and invigorating process to go through the record number of entries and the many examples of bold businesses creating opportunity in the Aberdeen city region.
With Scottish Retailers losing nearly 1.9 billion pounds of sales in the first four months of the pandemic – ILM Highland like every other business has had to look very closely at how they promote their retail shop offering to the Highlands.
ILM Highland is a Charity and Social Enterprise based in Alness which delivers valuable services to benefit the community, economy and environment throughout the Highlands. The Electrical Retail Shop is home to new and refurbished items such as washing machines, fridges and freezers, tumble dryers, cookers, vacuum cleaners and many other electrical products and has been one of many stores to make a significant loss over the last few months.
Profits which are made from the Electrical Retail Shop support our charitable services to help keep vulnerable people living independently at home through our Care & Repair and Handyperson services. With this in mind and to ensure ILM’s offering can reach the whole of the Highland community we are delighted to announce the launch of our online retail shop!
ILM Highland Business Development Claire Weaver has said – “Having the online retail shop allows us to reach a wider audience, we get many phone calls with customers looking for stock and they are faced with concerns over budget or perhaps issues with delivery to the Highlands. Having our stock online will allow them to browse what we available and work to a budget that they have. All of our stock is also available for delivery throughout the Highlands – this can be done on the same day depending on where the customer is located. We want to make things that little bit easier for people.”
ILM Highland also offer a collection service for your electrical items – all items that are collected are recycled or reused by their Waste Electrical service – this lowers the amount going to landfill and also helps the charity fund the additional charitable services of their business.
Maree Todd MSP, enthused “It’s great to see social enterprise re-evaluate and pivot to make things easier for people who might be more vulnerable in our communities. ILM Highland offer a fantastic service to local communities within the Highlands.”
For more information on ILM Highland or to browse their Electrical Retail Shop you can visit https://www.ilmhighland.co.uk
Commenting on the announcement by the UK Government that the UK and Japan have secured a free trade agreement, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce said:
“This is great news that we finally have a free Trade Deal with Japan. It is an important market for many of our key Scottish products and services. We need to ensure that Scottish businesses are prepared and supported to access the opportunities this market will provide for both existing and new exporters.
“Our Chamber Network in Scotland and in Japan look forward to working with our governments and business communities to move this forward on the ground where it matters.
“Let us hope that this success can be mirrored in the current negotiations to secure a Free Trade deal with our European partners.’’
Responding to the latest update of the route map for Scotland through and out of lockdown restrictions, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce said:
“It is disappointing that we seem to have taken a step back in terms of compliance with guidelines while the virus has taken steps forward. We need to control the spread of the virus more effectively and we urge all to follow the rules.
“We can ill afford a return to stricter measures. Scottish Chambers of Commerce has been witness to the huge efforts and investments businesses have made to implement safe operating practices so that they are COVID safe and secure. We need to move forward to ensure our economy can recover and stem the loss of jobs where possible. That’s why we need our offices to be allowed to open quickly, particularly those where businesses have worked closely with employees and invested heavily in safety procedures. For the sake of our theatres, live music venues, soft play and indoor contact sports facilities, clear guidance on when they can reopen safely is also required quickly.
“We need effort and investment rolled out to ensure testing facilities are expanded and properly resourced. Until a vaccine or some other intervention is in place, we must learn to manage the spread of the virus smarter.”