Sales and confidence show slump across many sectors of Scots economy

CONFIDENCE and sales dropped across several sectors of Scotland’s economy despite returning to trading as coronavirus restrictions were eased, according to a new report.

The Scottish Chambers of Commerce (SCC) Quarterly Economic Indicator (QEI) suggests retail and tourism were hit particularly hard ahead of a “bleak winter”.

More than half of retail and wholesale firms reported a fall in total and domestic sales in the third quarter of 2020, resulting in net balances of minus 28 per cent and 27% respectively, with confidence at a net balance of minus 15%.

Nearly half of tourism firms (46%) reported a fall in sales compared with the second quarter while 70% reported a fall in business confidence.

Around a third of construction and manufacturing companies, four in 10 retailers and more than half of tourism firms are also expecting further sales drops in the upcoming quarter.

SCC president Tim Allan said: “This latest survey shows how fragile some parts of the economy in Scotland remain during this crisis.

“It makes sense that there would be some improvement compared to the previous quarter when significant parts of the economy were in an almost unprecedented shutdown. But this winter brings significant risks for business, including further lockdowns and a decline in government support.

“Now is not the time to cut lifeline support. We expect joblessness to continue to rise, hitting hard from the start of November. There’s an urgent need to bridge the skills gap between those who have lost jobs to those employers that are still recruiting.

“Plans to develop and support training and retraining in areas such as digital and low carbon technologies will need to be implemented if we are going to build back better.

“Many sectors are showing increased worry about the risk of increased taxation. Coronavirus interventions represent a huge burden on the public finances, but we must ensure that business recovery is not strangled to repair them.”