slides from presentation delivered to the STUC Highlands and Islands Conference on Saturday 12 September 2015

1. State of the Economy
Stephen Boyd
STUC Highlands and Islands
Conference, 2015

2. Content
• Current state of the Scottish economy/labour
market
• UK Government economic policy – how’s that
‘rebalancing’ going?
• Ongoing and new threats

3. SCOTTISH ECONOMY AND LABOUR
MARKET…RECOVERY INCREASINGLY
EMBEDDED BUT…

4. Quarterly GDP growth rates, Scotland,
2007 to Q1 2015

5. Sector growth, Scotland, 2007 to Q1
2015
85.0
90.0
95.0
100.0
105.0
110.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2007 2008 2009 2010 2011 2012 2013 2014 2015
Services (total) Business services & finance manufacturing

6. Employment and unemployment rates
(%), Scotland, 2007-present
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
67.0
68.0
69.0
70.0
71.0
72.0
73.0
74.0
75.0
76.0
Jan-Mar2007
Apr-Jun2007
Jul-Sep2007
Oct-Dec2007
Jan-Mar2008
Apr-Jun2008
Jul-Sep2008
Oct-Dec2008
Jan-Mar2009
Apr-Jun2009
Jul-Sep2009
Oct-Dec2009
Jan-Mar2010
Apr-Jun2010
Jul-Sep2010
Oct-Dec2010
Jan-Mar2011
Apr-Jun2011
Jul-Sep2011
Oct-Dec2011
Jan-Mar2012
Apr-Jun2012
Jul-Sep2012
Oct-Dec2012
Jan-Mar2013
Apr-Jun2013
Jul-Sep2013
Oct-Dec2013
Jan-Mar2014
Apr-Jun2014
Jul-Sep2014
Oct-Dec2014
Jan-Mar2015
Apr-Jun2015
16-64 employment unemployment (RH axis)

7. Full and part-time employment (000s),
Scotland, 2007 to present
580
600
620
640
660
680
700
720
1,700
1,750
1,800
1,850
1,900
1,950
Oct 2007 - Sep 2008 Oct 2008 - Sep 2009 Oct 2009 - Sep 2010 Oct 2010 - Sep 2011 Oct 2011 - Sep 2012 Oct 2012 - Sep 2013 Oct 2013 - Sep 2014
full-time part-time (RH axis)

8. Reasons for working part-time, 2004-
2015
0
20
40
60
80
100
120
140
400
405
410
415
420
425
430
435
440
445
450
Jan 2004 -
Dec 2004
Jan 2005 -
Dec 2005
Jan 2006 -
Dec 2006
Jan 2007 -
Dec 2007
Jan 2008 -
Dec 2008
Jan 2009 -
Dec 2009
Jan 2010 -
Dec 2010
Jan 2011 -
Dec 2011
Jan 2012 -
Dec 2012
Jan 2013 -
Dec 2013
Jan 2014 -
Dec 2014
didn't want FT job couldn't find FT job (RH axis)

9. Employees/self-employed workers,
Scotland, 2007 to present
240
250
260
270
280
290
300
310
320
2,100
2,120
2,140
2,160
2,180
2,200
2,220
2,240
2,260
2,280
Jan 2007 - Dec
2007
Jan 2008 - Dec
2008
Jan 2009 - Dec
2009
Jan 2010 - Dec
2010
Jan 2011 - Dec
2011
Jan 2012 - Dec
2012
Jan 2013 - Dec
2013
Jan 2014 - Dec
2014
employees self-employed (RH axis)

10. Change in rate (%) by gender, Scotland,
2013-2015
-3
-2
-1
0
1
2
3
4
Employment Unemployment Inactivity
Men
Women

11. STUC Full-time employment deficit,
April 2015
The STUC’s estimate of Scotland’s full-time
employment deficit is as follows:
• unemployed 125,550
• inactive but who want a job 143,375
• Underemployed 184,518
• Total 453,443
A rate of 15.3% compared to the April
unemployment rate of 6%

12. HIGHLANDS AND ISLANDS

13. Employment rate (%)
0
10
20
30
40
50
60
70
80
90
Highland Glasgow Edinburgh Aberdeen Dundee Scotland
2008 2015

14. Unemployment rate (%)
0
2
4
6
8
10
12
Highland Glasgow Edinburgh Aberdeen Dundee Scotland
2008 2015

15. UK ECONOMIC RECOVERY…ANY
SIGN OF REBALANCING?

16. Still the slowest recovery on record
…GDP/capita over economic recoveries from 1830s to today

17. Household gross debt to income

18. Growth in real household disposable
income, annual average

19. Business investment as a share of GDP

20. Net trade contribution to real GDP

21. Total public sector spending and
receipts

22. NEW THREATS AND CHALLENGES

23. What’s there to worry about?
Domestic
• Spending Review 25
November; further
austerity & social
security cuts
• Possible interest rate
rise
• European Referendum
Global
• Ongoing uncertainty
• China slowing
• Possible US interest rate
rise, unwinding of QE

24. Highlands and Islands
• Falling oil price: a huge boost globally, a
positive at UK level, neutral for Scotland as a
whole (?), wholly negative for NE Scotland & H
& I;
• UK energy policy: significant negative impact
on renewables development
• EU referendum: possible threat to structural
funds

25. Brent Crude $/barrel