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'Worrying picture' emerging

Jobless rate in Scotland remains above UK average

Unemployment in Scotland remains above the UK average after 11,000 more people joined the dole queues in the three months to November.

Scottish GDP grew by 0.2% during the third quarter of 2016, below the UK average.

There are now 139,000 out of work and the unemployment rate is 5.1% compared to 4.8% for the whole of the UK. 

The labour market statistics also show that employment in Scotland fell by 14,000 over the same period to 2,604,000.

The Scottish government preferred to focus on a decrease in youth unemployment by 3.6% over the last year to 9.4%, the lowest youth unemployment rate since the series began, and below the UK. Scotland now has the second lowest youth unemployment rate in the EU.

It said that despite rising by 0.4 percentage points over the last quarter, Scotland’s overall unemployment rate also fell by 0.4 percentage points over the year.

Headline statistics for the September to November 2016 quarter:

  • Employment in Scotland fell by 14,000 over the quarter, and by 29,000 over the year, to stand at 2,604,000.
  • The Scots employment rate fell by 0.5 p.p. over the quarter to 73.4 per cent. The rate is below the UK average of 74.5 per cent.
  • Unemployment in Scotland rose by 11,000 over the quarter and is down 12,000 over the year.  The level now stands at 139,000.
  • At 5.1 per cent, the Scottish unemployment rate is above the UK’s rate of 4.8 per cent.
  • Economic activity fell by 2,000 over the quarter and now stands at 2,743,000. Also, the economic activity rate decreased over the year to stand at 77.5 per cent.
  • In December 2016, the number of people out of work and claiming Jobseeker’s Allowance was 52,700 and claimant count, including Universal Credit was 81,500.
  • Scotland has the second highest employment rate out of the four UK nations.
  • Scotland continues to have higher rates of youth employment than the UK, at 58% against 55.5%.
  • Scotland also has lower youth inactivity rates than the UK.
  • Scotland continues to outperform the UK on female employment and inactivity rates.

Scottish economy

Scottish GDP grew by 0.2% during the third quarter of 2016, according to statistics announced today by Scotland’s Chief Statistician.

On an annual basis, compared to the third quarter of 2015, Scottish GDP grew by 0.7%.

The services sector, which accounts for three quarters of the economy, grew by 0.4% during the latest period, the production sector contracted by 0.1%, and construction output contracted by 1.4%.

Industries which represent a large proportion of the economy or which have big quarterly changes have the most impact on overall GDP.

Services accounted for 0.3 percentage points of growth in the Scottish economy in quarter 3 2016. Construction accounted for 0.1 percentage points of contraction in the Scottish economy in the third quarter of 2016.

Scottish Chambers survey

Scottish business optimism in the fourth quarter was finely balanced and marginally positive in all sectors other than financial and business services, according to new data.

The Scottish Chambers of Commerce quarterly review with the Fraser of Allander Institute shows broadly positive trends in recruitment remained but cash flow was tightening across most sectors.s  

Neil Amner, chairman of the Scottish Chambers of Commerce Economic Advisory Group, said“Overall, these economic results show a positive outlook for key sectors in Scottish economy, particularly for manufacturing, which reported its strongest trend in new orders since 2014.

“However, businesses will be challenged in 2017 by rising prices, tightening cash flow & profitability, the impact of exchange rates on import costs and the burden of business rates.

“Business focus will be firmly on growth and new market opportunities for 2017, with business keeping a close eye on future trading relationships with the European Union and the rest of the world.

“The balance of optimism is very fine, so the difference between a good year and a bad year could rest upon the slightest of influences.”

Reaction

Minister for Employability and Training, Jamie Hepburn, said: “It is clear that the Scottish and UK economies, are currently facing challenging economic conditions nevertheless, despite a slight rise in the unemployment rate over the most recent quarter, it has fallen over the past year.

“It is also heartening to see how strongly we are performing in the youth labour market, where we see the unemployment levels among young Scots steadily declining.

“Scotland is also leading the UK in terms of the proportion of young people currently in work, which is testament to the effectiveness of our youth employment strategy, ‘Developing the Young Workforce’, and our commitment to support Modern Apprentices, providing 30,000 places by 2020.

“Despite the strong performance of the youth labour market, the Brexit vote caused significant economic uncertainty, threatening our economic recovery and the stability of our jobs market.

“Scottish Government analysis suggests that a hard Brexit could cost the Scottish economy up to £11 billion a year by 2030. Since the vote, Ministers have kept engaged with business and stakeholders to understand the challenges, mitigate their impact and ultimately protect our access to the single market as outlined in the Scottish Government paper, ‘Scotland’s Place in Europe’, published in December.

“Additionally, we have also announced a Capital Acceleration Programme, and the £500 million Scottish Growth Scheme, which is designed to provide investment guarantees, and some loans, of up to £5 million for eligible businesses.”

The Secretary of State for Scotland, David Mundell, said: “Today’s statistics underline the need for the Scottish Government to focus all their efforts on supporting jobs and economic growth, because they paint a worrying picture.

“Whereas across the UK the news is better, here in Scotland unemployment is up, employment is down and Scotland’s economy continues to lag behind that of the UK.

“The UK Government has devolved a raft of new powers to Holyrood, agreed a fair financial settlement as a strong foundation, and delivered £800m of extra investment for the Scottish government to spend. The Scottish government now needs to use all of these powers to secure and strengthen Scotland’s economy.”

Tory Finance spokesman Murdo Fraser said the SNP’s “pathetic” excuses on economic mismanagement were wearing thin, and it was time for some definitive action.

He pointed out the Scottish Government had more powers than ever to boost Scotland’s economy, yet still performance lags badly behind other parts of the UK.

Labour economy spokeswoman Jackie Baillie said: “It is now clearer than ever that there are significant challenges facing Scotland’s economy.

“Scotland also had the largest increase in economic inactivity over the past year of any nation or region in the UK. This is extremely concerning and it is time that serious work is undertaken to get to grips with the underlying causes. 

“That is why Labour wants the SNP government to commission a study into economic inactivity in Scotland. It is the single biggest challenge facing our labour market, but Nationalist ministers would prefer to ignore it.”



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