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Oil slump holds answer to unemployment figures

Terry MurdenPoliticians in Scotland seem unable to explain the rise in unemployment. Perhaps they should look north to the sparsely populated oil rigs for an answer.

The oil and gas industry has emptied thousands of workers since the price of a barrel plummeted in the summer of last year.

While some have found work with companies that can now compete for the high wages they were earning, there has been a downsizing of the industry which is not over yet.

Furthermore, this has had a knock-on effect throughout the economy. Manufacturers and engineers have reported a slowdown in orders, and the ripple effect makes its way right through to every supplier, from meat pies to paper clips.

There is, of course, a flip side to the slump in oil prices. Heavy users of fuel are enjoying a huge reduction in overheads.

There are other positives which, in the scheme of things, ought to be creating jobs. Recent surveys say that the construction sector has held up, largely because of public spending on infrastructure projects such as the Forth Crossing. Other sectors such as tourism and food & drink are supposed to be achieving new targets. The technology sector has never been healthier.

Yet jobs not being created at the same rate as elsewhere in the UK and the worry is that pressures are building that could make the situation worse.

Interest rates could rise next year and as Daily Business reported at the weekend, the retail sector has lost 3,500 jobs over the past year. Shop owners are warning of more to go if business rates are not reformed.

As it gets its number crunchers to work out what is going wrong, the Scottish government should also ensure it does not add to employers’ burdens by imposing more job-destroying costs on business.

 

 

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