For the first time in over a year, businesses in Scotland can see the first shoots of recovery as COVID-19 restrictions begin to lift, according to a leading quarterly survey led by the Scottish Chambers of Commerce (SCC).
The SCC’s Quarterly Economic Indicator (QEI) for the second quarter of 2021 indicates more positive growth across all sectors surveyed, albeit, caution is still the watchword for many businesses.
Key Findings:
- Pent up demand unleashed: All sectors have reported substantial rises in confidence and domestic sales, owing to the easing of general and domestic travel lockdown restrictions. Most results are positive for the first time in over a year, albeit from historically low bases.
- Caution looking ahead: All sectors have projected positive expectations for Q3, on balance, likely boosted by the expected further easing of lockdown restrictions. While firms are optimistic about sales revenue, they are more cautious around investment and staff levels with most firms envisaging no change to these in Q2.
- Faltering export sales: Covid-19 disruption and Brexit fallout has resulted in trading difficulties for businesses in services, manufacturing and retail as evidenced by falls in export sales and orders across these sectors.
- Inflation pressures: All sectors have recorded increases in concern over inflation, which may escalate as more consumers spend savings accumulated over the last 16 months and create uncertainty for business in terms of their costs and prices.
- Flat labour market: Most sectors saw a slight increase in employment, apart from retail, which saw no change over the quarter. Most firms, across all sectors, expect little change in Q3 which could result in sluggish jobs growth, with further challenges expected as the furlough scheme is withdrawn.
Tim Allan, President of the Scottish Chambers of Commerce said:
“The success of the vaccine rollout has enabled the easing of restrictions and the gradual reopening of the economy, unleashing pent-up demand in the economy. This has allowed some sectors to rebound more quickly than others, however, the route to economic recovery will be a marathon, not a sprint.
“It’s clear that concerns remain around the ongoing impact of Covid-19 as businesses grapple with huge uncertainties over what the economy will look like post-pandemic. Towns and city centres face new challenges as more people work from home and more flexibly, impacting on footfall and changes to consumer behaviour. The needs of employers and employees alike need to be finely balanced as we shape the recovery of our city centres which will impact on a wide range of sectors and supply chains.
“Equally, sectors such as tourism and international travel, which continue to operate with severe restrictions, are having to adjust to increased domestic demand, a simultaneous fall in international travel and a tightening supply of skilled labour. The sector needs continued financial support and greater clarity on when confusing and burdensome travel regulations will end, allowing greater numbers of international visitors to return.
“As we approach the end of restrictions businesses are increasingly turning their attention towards how to achieve long term growth and renew Scotland’s economy. We have recorded the first shoots of growth returning to our economy, and it is essential now that both the Scottish and UK Government’s do all that they can to stimulate demand and boost confidence in the coming months. Priority must be given to continuing the provision of targeted financial support where it is needed most and looking ahead, both Governments must create the right environment for businesses to get back on their feet, create jobs and trade successfully again.”
Commenting on the results, Mairi Spowage, Director at the University of Strathclyde’s Fraser of Allander Institute, said:
“In April, we saw growth in the Scottish economy of 2.0%. This takes us above the previous post-pandemic peak in October. However, the economy still remains 3.7% below the pre-pandemic peak.
“Despite the optimism in the economy, there are risks to recovery which could provide headwinds to growth. The dislocation in global trade was significant due to the pandemic. However, we also know that the end of the EU Transition Period has caused significant issues for manufacturers and others trying to rebuild these supply chains since the start of this year. This chimes with today’s survey results, which show significant negative impacts on exports.
“Recent announcements of the delay to the restrictions roadmap will lead to calls from some sectors that there should much more extensive business support to get them through to a position where they can properly operate. As well-meaning as initiatives like a new Council for Economic Transformation may be, practical policy measures to help these businesses survive through the winter are likely to be needed.”
The full report can be downloaded by clicking here
This month, we welcomed Caithness Rugby Football Club to our Chamber membership group.
CRFC are a local rugby club established in 1962. The club is registered as a charity and contributes in many ways to the local community. Their focus is of course on Rugby development but they also offer considerable experience in personal development and social skills. The club welcomes all age groups from micros to adults both male and female with representation in our national teams. The club has a large voluntary coaching team covering both sides of the county along with various other contributors from all disciplines.
Read more about the club here.
To discuss membership, please reach out to our Business Development manager, Fiona Levack. You can contact Fiona by email: fiona@caithnesschamber.com. You can read about membership on the website using this link.
If you’re already a member but would like a reminder of how to get the most from your membership, Fiona will gladly go over that with you too.
Following the First Minister’s statement to the Scottish Parliament this afternoon updating on the future of Covid-19 restrictions, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce said:
“This is the moment businesses have been waiting for and they can finally breathe a sigh of relief that Scotland is now on the path to the lifting of all restrictions from the 9th of August.
“We are firmly heading in the right direction which will allow businesses to plan ahead and we must now all do what we can to ensure the plan is implemented without the need for further delay.
“Businesses fully acknowledge the rising case numbers and the need to vaccinate more people before further re-opening and we welcome the move towards the suppression of the virus to a manageable level whilst balancing the impact on our economy. This will allow businesses to trade more openly and enable the economy to start recovering and rebuilding.
“However, as long as restrictions remain in place, it is essential that the Scottish and UK Government’s continue to provide focused and targeted financial support as well as supporting businesses in the longer-term as they recover from this unprecedented period of economic disruption.”
On the re-opening of non-essential offices and business travel:
“Office-based businesses had been crying out for clarity on when we can get back to business. Now, we have a clear timeline, we can plan in partnership with our employees how and when we will be returning to our offices.
“Re-opening of offices will benefit employee morale and mental health and allow businesses to consult with staff on increased flexibility in the workplace to tackle inequalities, attract talent and retain skills in the economy.
“The removal of restrictions on business travel will also drive-up confidence and crucially bring business travel in line with leisure travel, making it easier for businesses to operate across Scotland.”
On international travel:
“Scotland’s tourism sector, which supports so many jobs and businesses in every part of Scotland, has been one of the hardest hits by the restrictions on international travel and the business community need greater detail on when our borders will re-open and Scotland will start welcoming international visitors again.
“We would urge the UK, Scottish and other Governments to work together, in a four nations approach, to allow international travel to return safely and as quickly as possible. In the intervening period they should bring forward a package of tailored financial support, including extension of the furlough scheme to support Scotland’s aviation and tourism sectors whilst restrictions on international travel remain.
Commenting on the Scottish Government’s first estimate of Scotland’s Gross Domestic Product (GDP) for 2021 Quarter 1 published today, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“These statistics indicate that the Scottish economy has contracted by 1.9% during the first quarter of this year and compared to the first quarter of 2020 has dipped significantly by 5.4%.
“Whilst these figures are concerning and disappointing, they simply confirm the damaging impact that the coronavirus pandemic and partial shutdown of the economy over this period had on many Scottish businesses.
“There are points of light in these figures, such as increases in Scotland’s construction and production sectors, however it is clear that Scotland’s hospitality sector has been hardest hit and has borne the brunt of the restrictions over the winter months which paints a worrying picture for their ability to recover without greater support.
“Businesses want to see the economy re-opened with as few restrictions as possible. If government can deliver this, businesses will be able to rebuild confidence and increase economic activity in the second quarter of this year.
“The vaccination programme will be key to securing economic growth. Increased clarity on the re-opening of our economy and the eventual removal of restrictions, combined with continued financial support for businesses from the Scottish and U.K. Governments will propel business recovery and support a return to pre-pandemic economic output sooner.”
Responding to the expected delay in Scotland’s Roadmap, as suggested today by the First Minister, Dr Liz Cameron OBE, Chief Executive of the Scottish Chambers of Commerce, said:
“The statement from the First Minister today, which outlined that the easing of Covid-19 restrictions in Scotland is likely to be delayed at the next review by three weeks to the 19th July, will be frustrating and painful for many Scottish businesses who were gearing up to make the most of a boom in summer trade over the coming weeks.
“A delay next week will dampen hopes for many businesses, particularly for those sectors that remain closed and may be forced to wait even longer to reopen, placing them and the jobs they support at risk.
“Scottish businesses understand the need for restrictions to protect public health and it’s clear that the vaccine programme is the silver bullet that will facilitate the reopening of our economy. Any delay must be used to expand the vaccine rollout and deliver the crucial second doses that will move us out of lockdown restrictions faster.
“After months of uncertainty, businesses have been demanding greater clarity and we welcome today’s confirmation that the long-awaited publication of the Scottish Government review of the unviable social distancing rules and more detail on plans for taking Scotland beyond the levels system, will finally be published next week.”
Responding to the June 14th UK Government Coronavirus Briefing, Dr Liz Cameron OBE, Chief Executive of the Scottish Chambers of Commerce, said:
“Businesses who have been patiently waiting for restrictions to ease will be deeply frustrated by the Prime Minister’s announcement confirming the delay of the planned June 21st lockdown lifting in England and the subsequent prospect of further delay in Scotland.
“After an incredibly challenging 15 months, businesses were finally daring to hope that we were now on the path towards the full re-opening of our economy. The continuation of restrictions will be a significant setback.
“It’s essential, if restrictions in Scotland are extended, that the Scottish Government implement a fair balance of targeted restrictions that allows the gradual reopening of the economy to continue whilst tackling the growth of the Delta variant.
“We must also see the vaccine programme accelerated wherever possible – dedicating all available resources to this – while looking at opening up areas of Scotland with low levels of transmission and high levels of vaccination.
“If such confidence, reassurance and support is not provided by the government, then we will see more jobs and livelihoods placed under immediate threat. For businesses who have come so far over the past year, all possible action should be taken to prevent job losses and business shutdowns.”
Plans for Caithness to become the host site for a prototype generator for one of the world’s most efficient, cleanest and lowest carbon forms of energy have taken a step forward.
A bid to host the Spherical Tokamak for Energy Production (STEP) prototype fusion power plant was submitted by the Caithness and North Sutherland Regeneration Partnership (CNSRP) in March.
This has now been included in a list of 15 sites for further investigation by the UK Atomic Energy Authority (UKAEA), who launched the open call in December 2020.
If the Caithness bid is successful, the development could create hundreds of high-quality jobs locally, drive wider economic growth and attract further investment to the region.
Fusion technology is being developed worldwide as a transformational source of low carbon energy. It seeks to replicate the energy production process of the sun by fusing hydrogen into helium, producing huge amounts of clean energy, with virtually no emissions or waste.
The development would ultimately produce electricity for the national grid and could be instrumental in achieving Scotland’s net-zero targets and a carbon neutral economy.
Ian Ross, chair of the CNSRP, said:
“This is a great opportunity for Caithness and North Sutherland. We already have significant expertise in highly regulated technically challenging developments. We also have an existing supply chain, a welcoming community and support from all CNSRP member organisations.
“The fusion prototype development would dovetail perfectly with the decommissioning of Dounreay and complement our area’s existing wind and tidal forms of renewable energy generation.
“All of this and more means Caithness is ideally placed to host this development and make sure it delivers widespread long-term economic and community benefits, as well as wider progress towards the country’s net zero targets.
“I am delighted we have made it to the next stage and look forward to working with the UKAEA on evaluating our bid.”
Responding to the First Minister’s announcement on Coronavirus restrictions, Dr Liz Cameron OBE, Chief Executive of the Scottish Chambers of Commerce, said:
“It is immensely welcome that Glasgow will now be able to move from Level 3 to Level 2 on Saturday, as well as 14 local authorities across Scotland which will move to Level 1. This is thanks to the tremendous efforts of both businesses and the public in suppressing the virus.
“Businesses will understand the importance of tackling the new ‘Delta’ variant, but today’s decision will be a great relief for some and disappointing for others. While some areas will be able to take advantage of further re-opening, other areas have hit another roadblock.
“Where restrictions have been extended, the Scottish Government must provide adequate and targeted financial support for businesses directly affected by today’s announcement. The testing and vaccination rollout must continue to accelerate quickly so we can collectively meet the milestone of level 0 on 28th June.
“We also need urgent clarity and a clear timeline on the reopening of offices and further relaxation of restrictions on international travel. This must go hand in hand with a comprehensive physical distancing review which facilitates businesses to expand their trading capacities.”
This month, we welcomed Caithness Mentality to our Chamber membership group.
Caithness Mentality Coaching is specifically designed to help you become mentally strong and healthy.
- Are you looking to grow in confidence or resilience?
- Are you looking to overcome anxiety, fears, stress, or negative thoughts
Many of us are just living life. We should be loving life and thriving with all that we do. Life is too short to be just surviving.
Many of us suffer from low self-esteem, stress, and burnout. Research has found strong links between serious life illnesses including cancers, and stress. We live in a society where burnout and stress are normal. They are not. Stress and burnout can cause serious problems to your health.
Find out more about coaching from Caithness Mentality here.
Amentum have recently upgraded their membership to Silver Premier Partner and we’re thrilled to have them on board.
Premier Partners are important to the work of the Chamber and we provide the opportunity to raise your business profile and widen your engagement with the community. We work closely with each Premier Partner to ensure optimum exposure and an enhanced commercial profile for your company. This demonstrates your contribution to Caithness and your association with a business organisation dedicated to working on its members’ behalf and helping to create a vibrant Caithness economy that is successful, sustainable and diverse.
Read more about Premier Partnerships on our website.
