Study needed

If ever the Arran economy needed to be closely examined, that time is now.

And it is great to see North Ayrshire Council has had the foresight to commission the respected Fraser of Allander Institute to carry out the much-needed audit.

The Institute at the University of Strathclyde entered Scottish public life in 1975. In the 40 years since, it has become established as a leading independent economic research institute focused on the Scottish economy.

Ahead of its work on Arran, which will provide quantitative assessments of just what reduced tourist revenues mean for the island economy, it recently publish its quarterly commentary on the Scottish economy and this is what it found.

That the Scottish economy is now in its deepest recession in living memory and points out that while the depth of the collapse in GDP is largely artificial and entirely due to the lockdown, what matters is how quickly activity bounces back once the restrictions are lifted.

All signs are, however, that there will be some scarring and it will take some time before the economy recovers to a ‘new normal’.

The commentary considers a range of scenarios from a more optimistic viewpoint where confidence builds momentum, through to a more pessimistic scenario which includes a second wave of infection.

In the optimistic scenario, the economy is projected to take until the end of 2021, at the earliest, to fully recover lost output. In the pessimistic scenario, it could be 2024 before a ‘new normal’ is reached.

The Institute also points out that even when the economy returns to growth, the underlying structure of Scotland’s business base will be altered forever.