WHERE stands the real Scottish economy? Answer: it’s springtime and there are green shoots everywhere.
The (often gloomy) Fraser of Allander Institute hasrevised its forecast of growth for 2014 from 1.8 per cent in October to a robust 2.3 per cent.
UK output is slated to reach its pre-recession high sometime later this year – but the EY Item Club thinks Scotland has already recovered itsprevious peak.
The service sector in Scotland is already 2.2 per cent above its pre-recession peak. Retail sales in Scotland increased by 1.1 per cent in volume terms during the fourth quarter of 2013.
That’s 4 per cent on anannualised basis.
This is even better than in the GB, where retail sales increased by an annualised 3.7 per cent. Verdict: the consumer boom(let) has hit Scotland.
Scottish household expenditure is now 5.3 per cent higher than in the third quarter of 2013. How is this being financed? Some of it comes from an increase in earnings. Scottish disposable income grew by 0.7 per cent in Q3 2013 – up 3.1 per cent on the year. But we are also running down savings.
The household savings ratio in Scotland was 6.8 per cent in Q3 of 2013 – down from 8.1 per cent in the previous quarter. That’s a smaller contraction in the savings ratio than for the UK, which suggests Scottish consumers still have more to spend this year.
Just as well. On the export front, the latest date (from Q3 last year) shows that Scottish manufactured exports by volume are still 10 per cent below their pre-recession peak.
The big problem is that the pound has been rocketing in value since the turn of the year.
On the positive side, thelabour market is humming. The number of people working for Scottish companies is rising at its fastest rate for 16 years.
However, the latest Federation of Small Businesses’ survey indicates many businesses are concerned over skills shortages. This is having a knock-on effect on wage costs: Scotland’s output price inflation rate is now growing at its highest rate since 2011. Are we losing too many young graduates to London and Europe?
Aggressive Amazon writes new chapter
EUROPEANS continue to think that Amazon is just an internet bookseller with add-ons. But the company only ever used book sales as an entry point.
It has always wanted to be a global retailer that sells everything. Hence its recent acquisitions splurge into media.
On Thursday, Amazon announced it is buying comiXology, a popular digital publishing platform for comic books. The comiXology deal follows the purchase of Lovefilm, the movie subscription service.
The Lovefilm deal is especially significant. Amazon is chasing Apple and Google in a fight to cut your TV’s ties to traditional terrestrial, cable and satellite platforms.
Instead, the digital giants want to link your living room set to the fire hose of internet video, using a set-top box.Amazon launched its own set-top (Fire TV) earlier this month.
Here’s my prediction: if and when Amazon and the other the internet giants get the technology together to compete with the likes of Sky, expect the existing satellite and cable providers to strike back on price and content.
In this war, the quality of what’s on the screen will trump the technology. But then, Amazon has always been a retailer, not a hi-tech manufacturer.