Heathhall Business Centre. The clue’s in the name. We’re the home of thriving businesses of all shapes and sizes, each making a splash in southwest Scotland. But in what shape will 2024 find the Scottish economy?
Let’s take a look at what’s being said out there in the news-sphere…
Scottish Economy Forecast 2024: The Overview
Buoyant consumer spending might just have helped the Scottish economy avoid a recession – that’s according to UK economic forecasting group, The EY ITEM Club.
It says that economic growth has been flat since Q2 of 2022 and that’s how it will likely remain into 2024 when GVA (Gross value added, a productivity metric that measures the contribution of a corporate subsidiary, company, or municipality to an economy) is expected to rise by 0.3%.
This is all against a backdrop of persistently high interest rates and above-target inflation, despite inflation dipping.
The prospects are better for 2025 (Scottish GVA expected to rise by 1.3%) and 2026 (Scottish GVA expected to rise by 1.5%), with an accelerated economy. In part due to Scotland’s labour market demographics, growth will remain low in historical terms and is expected to lag the UK as a whole. But removing London from the forecast means that Scotland’s expected growth performance has more parity with the rest of the UK.
The recent ONS Annual Survey of Hours and Earnings revealed that the gender pay gap in Scotland fell to 1.7% among full-time employees and 8.7% among all employees in 2023.
The ManpowerGroup Employment Outlook report for Scottish businesses predicts a healthy 2024 quarter one +26%, while a record number of 2.45 million people remained in jobs between August and October 2023, despite the same data showing an 18-year high in skills gaps.
Will commercial property catch a break?
Commercial property activity will likely remain lukewarm in 2024 in the first half of the year because of high interest rates and the cost of lending keeping investors off the acquisition trail.
Speaking to insider.co.uk, Cameron Stott, head of Scotland at JLL, thinks that values may soften further into 2024, while the cost of debt may also force some sellers to liquidate their assets thereby creating opportunities for others
He said: “With this in mind, we can expect more buyers to come into the market in 2024 as they call the bottom of the market and the start of the next property cycle.”
Robert Forman, Edinburgh-based partner in the built environment sector at Burges Salmon, also speaking to insider.co.uk, said there is hope that 2024 will see an upturn in transactional numbers.
“There is also a feeling of excitement for the big developments happening across Scotland – including the introduction of the Green Freeports and the further implementation of the National Planning Framework 4 – will help in levelling up Scotland by delivering a big boost to our economy.”
South West Scotland leading the way in renewable energy
Dumfries-based Smart Green Shipping is building a recyclable ‘wingsail’, launching in 2024. Its aim? To reduce fuel consumption on large vessels.
Speaking to insider.co.uk, founder Diane Gilpin said: “I expect to see investment into innovation that addresses the enormous climate challenges we face as a global society.
“The urgent need for new climate infrastructure is evident, yet investments into this sector are still insufficient and inconsistent.
“In my world – shipping – a range of alternative fuels are being discussed and developed to power a zero-emission world, but most are decades away from being available at scale, and all of them have an extremely high-cost burden for ship operators.
“Solutions such as our wingsail technology can make an immediate impact, reducing emissions and cutting fuel costs and these benefits resonate deeply with the market – this, in turn, is piquing the appetites of investors for green innovations which I expect, and hope, to see continue throughout 2024.”
The final frontier
The UK ranked third for the number of space tech investment deals globally last year, with Scotland going boldly in all this. Glasgow manufactures more satellites than anywhere else in Europe and Edinburgh leads the pack as the continent’s space data capital.
Sources:
insider.co.uk
ey.com
ONS