Employment trends until 2024 are tale of two cities

● Gap between economic growth in Scotland and UK narrowing

New figures from EY suggest the Aberdeen labour market will contract slightly every year between now and 2024, while employment in Inverness will grow by 0.3% annually.

But the 0.1% average annual drop in the Granite City will coincide with local economic growth of 0.9% a year in gross value added terms, while the Highland Capital is expected to average 1.2% GVA growth annually, the professional services firm says in its EY Scottish Item Club 2020 Forecast.

The document also suggests the Scottish and UK economic growth gap is narrowing, from 0.5% GVA last year to a predicted 0.2% lag north of the border in 2022.

Scotland’s economy is predicted to grow by 0.8% GVA this year before picking up to 1.4% next year.

EY also says Scotland’s population is likely to peak next year, with workingage immigration having fallen by 70% between 2018 and 2020 in the run-up to Brexit.

The report says the private services sector will continue to drive economic progress across Scotland, contributing more than two-thirds of GVA growth this year.

Professional, scientific and technical activities is the sub-sector expected to drive most growth this year, at 2.7% GVA.

Consumer spending in Scotland is expected to grow by just 0.4% in real terms this year.

While this will be aided by 0.8% in real terms growth in personal disposable incomes, spending is likely to stall as caution increases towards the end of the Brexit transition period, EY says.

Speaking on the eve of the report’s publication today, EY UK chief economist Mark Gregory said: “This will be a pivotal year for the Scottish and UK economies following the decisive outcome of the general election in December.

“Global economic growth is slowing, further complicated by coronavirus, and trade negotiations are ongoing, but uncertainty is beginning to show signs of easing and there has been an uptick of sentiment,” added Mr Gregory.

FIGURES: How the cities are expected to fare in gross value added terms is also outlined in the EY Scottish Item Club 2020 Forecast