As I See It: Terry Murden
Scotland’s economists have been in full thundering ‘gloom mood’, giving a stark and bruising assessment of the outlook and warning of “subdued levels of confidence and investment”.
Yet even before the send button was pressed on this latest view from the Scottish Chambers of Commerce and Fraser of Allander Institute other surveys were reporting a growing feelgood factor across the nation.
In these jumpy economic times, with Brexit “done”, but by no means over, it’s ever-more important to be up to speed with developments. The SCC/FoAI survey was out of date before it was issued, having been conducted in November and December when the country was riven with Brexit imponderables and political stalemate.
Setting political preferences aside, the general election at least gave us a majority UK government and the remit to move the country on from its Brexit squabbling. The storm clouds that had hovered over business suddenly lifted. The economic sun began to shine.
A CBI survey, also published this week and conducted in the aftermath of the election, reflected this change in mood. It was not only more upbeat, it showed the biggest swing from pessimism to optimism for 60 years.
While the SCC/FoAI survey was reporting that “companies are relatively downbeat about the next quarter results, with many predicting falling sales and investment”, the CBI’s manufacturing survey told us that “optimism had improved significantly and at the fastest pace since April 2014” and “a record proportion of firms expecting to authorise capital expenditure in order to expand capacity.”
Chambers president Tim Allan was called in to the radio studios to give his verdict on the Chambers survey, but had to acknowledge that business leaders were actually more cheerful than was presented in its gloomy prognosis.
Another survey from Clearwater International reveals 51% of UK small business owners are feeling optimistic ahead of next week’s Brexit deadline. The IHS Markit’s UK Composite Flash Purchasing Managers’ Index for January just hit a 16-month-high and showed the services sector returned to growth.
Output grew at the fastest rate for 16 months amid rising demand for both manufacturing and services, suggesting business is rebounding after declines seen late last year, according to IHS Markit’s chief economist Chris Williamson.
So the indicators seem to be pointing up, not down.
Of course, there will be some regional variations in the statistics, but on the basis of these other surveys there is a good chance we’ll see a brigher picture being reported in Scotland. Even if we have to wait a couple of months to find out.
Assessing the true picture of Scotland’s economy has often suffered from “data lag”. The Chambers’ survey is a case in point. On reflection, conducting a survey in the run-up to what was billed as the most important general election of recent times was not such a good idea when so much hinged on the outcome.