Scottish economy ‘heading to pre-recession levels’

Finance secretary John Swinney welcomed the news. Picture: Neil Hanna

Employment, exports and economic confidence among households and businesses all rose in 2013, while unemployment and economic uncertainty fell, Dr Gary Gillespie’s latest report said.

However, investment has remained “relatively weak”, and sustained recovery will require productivity and real wages to keep going up, he said.

The news was welcomed by finance secretary John Swinney, who said it showed the Scottish economy growing faster than the UK’s, but Labour’s Iain Gray said it was “a recovery only for the rich”.

Dr Gillespie’s report states: “The macroeconomic indicators for Scotland provide grounds for some optimism, with the economy moving closer to pre-recession levels.

“The growing recovery in the UK, US, and more recently in the euro area also spell positive news, as they are Scotland’s most important trade partners.

“Looking ahead, as in the rest of the UK, sustaining the recovery in Scotland into the medium term will require an improvement in underlying competitiveness, linked to a sustained pick-up in productivity and real wages.

“With the strengthening in output and the labour market over the year, and a more positive level of confidence across sectors, recent Scottish output forecasts have been revised upwards. Overall, the outlook for next year is more positive than 12 months ago.”

It added: “Economic recovery in Scotland has continued through 2013, and with it we have seen a reduction in economic uncertainty and a boost to household and business confidence.

“The strengthening of the Scottish economy over the year has been reflected in the labour market, with employment continuing to rise, driven by a rise in full-time employment, whilst unemployment and in particular economic inactivity have continued to come down.”

Mr Swinney said: “Recent GDP and labour market statistics show the Scottish economy growing faster than the UK over the year to quarter two and employment levels up by 83,000 over the year.

“There will be no let-up in the Scottish Government’s commitment to securing economic growth, which is why in this spending review period we are investing £10 billion in capital projects, building homes, schools and facilities to support the economy.

“As [the white paper] Scotland’s Future outlines, it is only with the full powers of independence that we can build a wealthier, fairer and economically sustainable Scotland ensuring that everyone benefits from our natural wealth and talent.”

But Mr Gray, Scottish Labour’s finance spokesman, said: “This script could have been written by George Osborne.

“For the families who had to rely on food banks for Christmas dinner or payday loans to buy presents for their families, the boasts from the SNP government about the performance of the economy will mean nothing.

“A recovery based on low pay and zero-hour contracts is no real recovery at all. A recovery only for the rich is no real recovery either.

“This shows astonishing complacency from an SNP government that takes credit for the good and blames the bad on others.”