The Courier & Advertiser (Perth and Perthshire Edition)
Survey contains pleasant and unexpected surprise
The latest figures from the Scottish Chambers Quarterly Economic Indicator (SCC QEI) came as a pleasant surprise.
They suggest Scottish businesses are performing well, despite underwhelming growth in the economy and continuing uncertainty over the Brexit process.
Produced in association with the Fraser of Allander Institute (FAI) at Strathclyde University, the SCC QEI figures show the net balance of businesses reporting increased profits continuing to improve in the third quarter of this year.
Third quarter Scottish GDP figures published at the beginning of October might have lead us to predict a gloomier mood at the grass roots, albeit tempered with the caveats that accompany volatile quarterly figures.
Those GDP figures showed Scottish growth of only 0.1%, compared to 0.3% across the UK, which requires some strenuous political spinning to be made to appear acceptable.
Over the previous year, Scottish growth totalled just 0.5% compared to 1.5% for the UK, and five of the last six quarters have recorded minimal improvements, making these upbeat SCC survey findings even more counter-intuitive.
Apart from retail, all major sectors continue to show a positive net balance in sales revenues.
The stand-out sector continues to be tourism, buoyed by a weak pound making holidays and visits in Scotland that bit more competitive.
Financial services also appear to be building on its strong start to 2017 although activity has yet to regain previous heights.
The resilience of Scottish companies seems particularly marked in construction where a positive net balance is being achieved in defiance of widely-reported sectoral fragility.
Based presumably on an increased ability to weather downturns, the success of Scottish builders bodes well for their performance in more expansionary times.
How is this all playing in terms of jobs?
Professor Graeme Roy of the FAI admits he is puzzled by the continuing strength of the Scottish labour market, which is strangely out of sync with the relatively anaemic economic growth.
Employment in Scotland continues to hover at record highs, so much so that employers have struggled to find skilled workers prepared to fill the right roles in the right places.
While it is better to have record employment than record unemployment, the mismatch in supply and demand is a cause for concern.
Earlier this month the Scottish Chambers Economic Advisory Group heard anecdotal evidence of the struggle many businesses have to make the opportunities they offer acceptable to today’s workers.
Businesses that want to attract the talent they need will, in the words of one council member, have to “reimagine the workplace”.
The alternative is slower growth and wage costs rising to higher levels than companies can afford to pay.
That seems to be a clear message from this quarterly survey – that it is only through innovation, investing in productivity improvements, and developing the skills of our employees that companies can insulate themselves against wider economic forces beyond their control.