Amid all the deluge of recent commentary on our economic fate, it’s been all too easy to overlook the many items of good news that have gone under-reported.
For example, looking at the picture UK-wide, a CBI report out today finds that private sector growth remained steady in the three months to November.
A survey of 715 respondents across the manufacturing, distribution and service sectors showed the pace of growth rose to a balance of plus 9 per cent from plus 8 per cent in the three months to October. Retailers and consumer-facing companies reported a rise in growth, though manufacturers reported a slower pace of improvement. Businesses across most sectors, it found, expected to see a slightly higher rate of growth continue across most sectors over the next quarter.
The findings are broadly supported by the latest Markit/CIPS Purchasing Managers survey showing slower but still decent UK manufacturing expansion in November.
Global Insight economist Howard Archer expects GDP growth to come in at 0.4 per cent quarter-on-quarter in the fourth quarter, but there is a possibility that it could hold up at 0.5 per cent quarter on quarter, especially given the current strength of retail sales.
While the purchasing managers reported that manufacturing activity slowed in November, the survey still pointed to clear expansion, with output rising at an above average rate. And above-average domestic and export orders growth in November should be supportive to manufacturing output in the near term at least.
But what specifically of Scotland? Big data calculations on GDP performance are none too reassuring. But that would be to overlook many examples of resilience and expansion across the private sector.
Highlights featured in the latest monthly commentary from Inverness-based Mackay Consultants include the following.
Work on the most advanced combat ships will start next year securing jobs for the next 20 years at BAE Systems’ shipyard on the Clyde in Glasgow. Steel will be cut for the first of eight Type 26 combat ships with the project expected to last until 2035.
Chevron Aircraft Maintenance has announced plans to invest £8.5 million in a new “centre of excellence” at Prestwick Airport, expected to create up to 82 jobs. The plans have been supported by a £2m grant from Scottish Enterprise.
Customer service firm Webhelp has announced plans to recruit 190 people across four sites in Scotland before the end of the year – these in addition to the 80 in Falkirk and the 14 in Rothesay created over the past few weeks.
Beeks Financial Cloud, providers of cloud computing services to the finance industry, will create 20 jobs in Paisley in Renfrewshire as part of a £2m investment in their facilities. They are also expanding operations into Hong Kong as they target clients and brokers across China.
Chivas Brothers, the whisky and gin business, announced plans for a £40m investment at their Kilmalid site in Dumbarton. The plans will see the sister site in Paisley close in three years’ time, with all staff transferring to Dumbarton. The transfer is scheduled to start in 2018.
Manufacturing group Tokheim confirmed tentative proposals to expand their manufacturing site in Broughty Ferry, Dundee, which could result in the need for 300 extra staff. Tokheim, which specialises in fuel dispenser manufacturing, has submitted a planning application to Dundee City Council to expand their headquarters on Dundee’s West Pitkerro Industrial Estate. If the move goes ahead, the US-owned firm believes it will have the infrastructure available to almost double the current staffing pool of 400.
More than 150 jobs could be created if plans to import liquefied natural gas (LNG) directly to the Port of Rosyth get the green light. Stirling Council has submitted a planning application for a floating pontoon on the River Forth in Stirling as part of plans to “reconnect” the town with the Forth and take advantage of its waterfront location. The council stated that their plans could boost its economy by £10m and create up to 500 jobs.
Thus, beneath all the gloomy commentary surrounding Brexit and concerns over “uncertainties” next year – has there ever been a period without uncertainties of some sort? – business carries on, and new investment and expansion continues.
And small-scale investment with potential for future growth ahead should not be overlooked. Last week brought news that Semefab, the Glenrothes semi-conductor manufacturer, is to invest in new equipment. The silicon wafer foundry operation’s investment will mean an injection of £1.25m into the Scottish economy. The expansion is supported by £220,000 of Regional Selective Assistance from Scottish Enterprise. Sensors for the “internet of things” are key development areas for the company’s future, as are “in the home” medical sensors for diagnostics and control of medication. .
Finally, there was an appreciation of support by Holyrood’s MSPs for small firms last week ahead of Small Business Saturday yesterday. The Federation of Small Businesses urged MSPs to mention favourite local businesses in their speeches.
This they duly did. Ash Denham, MSP for Edinburgh Eastern, named local business Two Sisters on Portobello Road, Edinburgh. Scottish Labour leader Kezia Dugdale also highlighted a Portobello firm, The Beach House café, as an enterprise which contributed to the local community. Patrick Harvie MSP, co-convener of the Scottish Greens, named cheesemonger George Mewes on Glasgow’s Byres Road as a personal favourite. And Ross Thomson, Scottish Conservative MSP for North East Scotland, highlighted Wool for Ewe in Rosemount, Aberdeen, as an award-winning local operator.
Thanks to these endeavours – and the contribution of hundreds of thousands of firms across the country – the economy overall has confounded the gloomy predictions and continues to grow. Latest data confirms that the economy remains on track to achieve a similar growth rate in Q4 to the 0.5 per cent seen in Q3.
We will need all this support and more in the period ahead.