Leaders: Work to do to maintain economic cheer
Good economic news in recent times has been as rare as water in the desert so there is a risk of falling on statistics showing that the Scottish economy grew by 0.6 per cent between July and September last year (which when annualised translates into a healthy 2.4 per cent) like a parched traveller arriving at an oasis.
However, there is reason both to be cautious while at the same time to be moderately cheered. The caution comes because these are historic figures, which offer little guide to the present or even the future. Figures for the UK economy say that after the 0.9 per cent bounce up partly caused by the Olympics in the third quarter of 2012, the whole of Britain went backwards again in the fourth quarter, with an output reduction of 0.3 per cent. Scotland may well have suffered a similar fate, but that will not be known until April.
However, while the Scottish economy moves in very similar rhythm to the UK, there is some reason to think that Scotland’s recovery from the double-dip of the first half of 2012 is more solidly based. Scotland experienced negligible Olympic economic benefit, so the uplift has been achieved without any one-off contributions.
As much as two-thirds of the gain came from manufacturing, with food and drink doing particularly well. As the euro has risen in value against the pound since the start of the year and the eurozone soaks up about 20 per cent of exports (including sales to the rest of the UK), there could be sustained growth to come from manufacturing.
Against these cheering trends, construction is a cause for concern. After a surge in the second quarter, it fell back again by 0.4 per cent in the third. Building activity has fallen by some 16 per cent from a post-recession high in 2010 and as it accounts for about 8 per cent of the economy, this is significant.
Even worse, the industry believes that the 7 per cent contraction over the past year recorded in these official statistics is too optimistic and that, using some other data, a 12 per cent tumble might be more accurate. Whatever the size of the drop, there is clearly a strong case for government action, particularly as spending on building work creates a lot of jobs and has a big stimulus outside the industry via spending with suppliers.
For the Scottish Government, now preparing its budget for 2013-14, that would mean directing more money into building work with housing perhaps the fastest way to get activity going. The UK government too, due to present its budget in March, should also be listening to calls for action, particularly to pleas for VAT on building repairs, modernisation and extensions to be cut from 20 per cent to the 5 per cent that applies to new home construction.
Since the private sector is leading the recovery, the onus is now on government to add more momentum.
Back Scotland to upset the odds
Into the baleful and unhappy hunting ground that is Twickenham go today Scotland’s rugby team. Statistics and records say the odds are against our lads recording a victory in this, probably the sternest test they will face in this year’s Six Nations championship. It is 30 years since Scotland defeated the auld enemy at what some English folk still call Twickers.
Statistics and records be damned! Let’s slay a few rabbits, or other animals, and examine their entrails for omens instead. And lo! Is it not the case, as we reported yesterday, that the winning team of 1983 included a Beattie and a Laidlaw, and does not the squad for 2013 have those very same names in it too? And do not those veterans of yesteryear – happily still with us – report that they, too, were given very little chance of winning and yet left England gasping?
We feel much better already. And we feel better still having just reread Will Carling’s comments that the defeats Scotland inflicted on the English teams he captained occurred when the English team felt at their most arrogant. So, the facts that England have just defeated New Zealand, the world champions, and Scotland have just lost to Tonga are a perfect fit for the pattern Scotland needs in the build-up. The entrails also draw attention to the possibility that Scotland have a secret weapon – an attack led on the flanks by Tim Visser who is, er, a Dutchman, and Sean Maitland who is, ahem, a Kiwi.
Away with your querulous doubts! Residency rules, set down by the International Rugby Board, mean both are impeccably Scottish, a fact which can only confuse the English. Good heavens, is that the time? Just enough to rush off and lay in some victory beer.
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Weather for Edinburgh
Saturday 18 May 2013
Temperature: 9 C to 13 C
Wind Speed: 18 mph
Wind direction: North east
Temperature: 9 C to 18 C
Wind Speed: 8 mph
Wind direction: North east