<
 
 
 
 
×
>
You are viewing an archived web page captured at 11:57:58 Feb 06, 2022, which is part of the National Records of Scotland Web Archive. The information on this web page may be out of date. See all captures of this archived page. Archived web pages you visit here may leave cookies in your browser. These are not owned, controlled, or used by NRS. NRS do use cookies, including Google Analytics, to monitor site usage and performance. These can be managed in your browser settings. Find out more about cookies.
Loading media information
hide

Publication - Research and analysis

Monthly economic brief: January 2022

Published: 1 Feb 2022
Directorate:
Chief Economist Directorate
Part of:
Economy
ISBN:
9781804350065

The monthly economic brief provides a summary of latest key economic statistics, forecasts and analysis on the Scottish economy.

Monthly economic brief: January 2022
Overview

Overview

This month’s economic brief provides an update on the Scottish economy as it reached an important milestone in its recovery from the pandemic at the same time as the Omicron variant led to a tightening of public health restrictions during December and January, continuing to emphasise that the pandemic is not over.

The latest GDP data for November, prior to the emergence of Omicron, showed that the Scottish economy grew 0.8% over the month with broad based growth across the services, production and manufacturing sectors. Furthermore, Scotland’s GDP had recovered to above its February 2020 pre-pandemic level for the first time (+0.6%), and broadly in line with the UK as a whole. However it’s important to note that the pace of recovery continues to vary by sector, with the group of consumer facing services industries remaining 5.5% below its pre-pandemic level.

Those industries, particularly in hospitality and leisure, have been most exposed to the restrictions introduced in December to slow its spread, impacting on demand and the capacity at which businesses could operate during this important trading period, and renewing uncertainty for consumers and businesses. Business survey data indicates that the pace of growth slowed in December in Scotland and across the UK as a whole.

At the same time, inflationary pressures have continued to strengthen with inflation rising to 5.4% in December, its highest rate since the 1990s. This is expected to rise further in the first half of 2022, and presents an extremely challenging outlook for household finances. Consumer sentiment in Scotland weakened over the fourth quarter of 2021 (though remained positive overall) with expectations for the economy and household finances moderating from earlier in the year.

Scotland’s labour market has continued to perform strongly following the end of the furlough scheme in September. Unemployment fell to 3.6% in September to November, below the rate at which it entered the pandemic. Furthermore, payrolled employee levels continued to rise in December and are now 44,000 (1.9%) higher than they were in September when the furlough scheme ended.

Challenges of shortages in the labour market remain however, with demand for staff continuing to rise in December while staff availability has remained subdued. This, coupled with higher numbers of staff self-isolating, has been a real concern for businesses over December and January.

Looking ahead, although economic activity may disrupt the recovery at the beginning of the year, the easing of restrictions at the end of January should provide renewed optimism for businesses and households. However, supply chain challenges, labour shortages and the further rise in inflationary pressures at a domestic and global level, continue to present significant headwinds for the economic outlook this year.


Contact

Email: OCEABusiness@gov.scot