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THE SCOTTISH ECONOMY IN 2010 - A SLOW AND FRAGILE RECOVERY
[ 21-01-2010 ]
Scottish Chambers of Commerce have today (Thursday) released their Business Survey results for the fourth quarter of 2009. The survey, conducted in conjunction with the University of Strathclyde’s Fraser of Allander Institute, suggests that despite an improvement in the position from a year ago, there is still an uncertain year ahead for the Scottish economy and a fragile and tenuous economic recovery.
Garry Clark, Head of Policy and Public Affairs at Scottish Chambers of Commerce, said:
“Scottish business is clearly in a better position at the start of 2010 than it was twelve months ago, but our latest survey reveals that we cannot take the recovery for granted and that this year is likely to pose further challenges to our fragile economy.
“Already businesses have had to contend with the costs of a harsh winter, the re-imposition of VAT at 17.5% and the continued threat of industrial action in the postal and airline industries. Pressures on national, devolved and local Government budgets are likely to increase in 2010, and together with a possible weakening in consumer spending, coupled with increased pressures on margins as a result of rising raw material and energy costs, these could threaten the emerging and fragile recovery.
“On the positive side, there is further evidence that the first signs of recovery, led by manufacturing, and which we first reported in our July survey, have been supported by a better year in tourism. We have also seen signs of a return to positive investment trends in manufacturing for the first time in nearly two years, and evidence of improving employment levels in the sector may be linked to the Scottish Government’s positive action to promote the recruitment and retention of apprentices. This would be a timely reminder of the ability of the Scottish Parliament to influence the direction of Government policy to help our economy.
“However with few signs of any sustained improvement in activity across other sectors, it is clear that our recovery is likely to be slow and fragile and that, in a UK General Election year, politicians of all parties must recognise that if economic growth is to be sustained, increased tax revenue must come from economic growth and widening the tax base rather than increasing rates of tax on already hard pressed businesses.
“It is time to re-assess the planned increases in National Insurance Contributions and in fuel duty, a
s rising costs will have an adverse effect on business and the Scottish economy.”
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