TIME was when Scotland was most famed for its iconic engineering and shipbuilding industries. The economically-stagnant late 1970s and “reap the whirlwind” early 1980s of recession and Thatcherite industrial structural reform scarred the face and debilitated the body of both.
In many ways, the mantle passed to Scotland’s thriving financial services industry from the late 1980s onwards, but the banking crash has since prompted soul-searching and chastened confidence in that currently diminished industry.
Nature abhors a vacuum, however, and moving without too much fanfare over several years now to become a powerhouse component in the country’s industrial machine has been the food and drink industry.
In this time of high UK unemployment, Bank of Scotland reveals that the sector is in such rude health that it plans to create 5,600 jobs over the next five years.
Two out of three Scottish food and drink producers say they expect to take on staff by 2017, while the sector believes it can realistically grow revenues by more than half a billion pounds in that period.
The latter is an ambitious target, but looks achievable given the outperformance of food and drink north of the Border.
Nowhere is this more apparent than in the eye-catching success of the industry’s exports, led by the sector’s stormtroopers, the Scotch whisky industry.
Even allowing for the recent economic slowdown in emerging markets, Scotch exports jumped 11 per cent in the first six months of 2013.
Apart from its established dynamic now, Scotland’s food and drink industry will also be able to tack to the favourable one-off winds next year of the Commonwealth Games and the Ryder Cup.
Perhaps appreciating the irony, but spectators seldom watch top-level sports people without food or drink to hand.
Carney may want a slower-paced recovery
IT’S ironic, but new Bank of England (BoE) governor Mark Carney could be forgiven for secretly wishing the gathering, widening UK economic recovery would slow down just a bit to maintain his credibility with financial markets.
In his newly-minted UK forward monetary guidance, Carney suggested that historically-low interest rates of 0.5 per cent would not rise until unemployment fell from the current 7.8 per cent to 7 per cent.
That implies 750,000 jobs being created, and the central bank does not think that will be achieved until 2016. But the positive UK economic data keeps on coming. with its inflationary implications. Hence the BoE keeping its rates on hold yesterday, with no rise since spring 2009.
You would think something has to give. When does the eventually irresistible force of economic rebound meet the immovable object of an employment objective?
And there is such a thing as a jobless recovery, at least for a period of time. The answer is that Carney has built get-outs – to paraphrase – into the guidance.
Rates can still rise under his regime if inflation becomes too threatening. The central bank could change its mind on that mooted three-year timeframe for a rate rise without any room for allegations of a U-turn at all.
Financial markets should calm down, be pleased that a recovery seems to be gaining traction, and let rates take care of themselves.