Publication - Research and analysis

Monthly economic brief: June 2020

Published: 8 Jun 2020
Gary Gillespie
Chief Economist Directorate
Part of:

Provides a summary of latest key economic statistics, forecasts and analysis on the Scottish economy.

17 page PDF

2.2 MB

17 page PDF

2.2 MB

Monthly economic brief: June 2020
GDP Growth Outlook

17 page PDF

2.2 MB

GDP Growth Outlook

The economic outlook for 2020 has deteriorated significantly as a result of the coronavirus pandemic and the necessary restrictions on economic activity to minimise the spread of the virus.

Range of 27 independent forecasts for UK GDP in 2020 by month
Range of 27 independent forecasts for UK GDP in 2020 by month
  • The scale and duration of the economic impacts remains uncertain, however the degree of pessimism in forecasts has increased over the course of the year.
  • Scotland's scenario analysis published in this edition, suggests GDP could fall by 14% in 2020.
  • Scenario analysis from the Bank of England estimates UK GDP could fall by 14% over the year while HM Treasury's monthly summary of independent GDP forecasts reports UK GDP is forecast to contract by an average of -8.6% in 2020 (down from -5.9 in April 2020).

COVID-19 Regional Exposure and Resilience

Share of employment in most exposed sectors by local authority (%)
Share of employment in most exposed sectors by local authority (%)

Regional exposure to the impacts from COVID-19 will vary due to the varied composition of industrial, workforce and wider population structures.

Recent Scottish Government analysis developed a sectoral risk rating based on exposure to international supply, international and domestic demand and labour market disruptions[14]. The adjacent chart shows the share of employment in these sectors where overall risk exposure to the economic effects of COVID-19 may be greatest across Scotland's 32 local authorities. Island local authorities and some urban areas have lower shares of employment in the most exposed sectors.

Share of jobs in most exposed sectors for urban and rural local authorities (%)
Share of jobs in most exposed sectors for urban and rural local authorities (%)

Overall, local authorities that are rural or mainly rural have slightly higher shares of jobs in the most-exposed sectors.

However, the number of jobs in the most exposed sectors is highest in Glasgow, Edinburgh and Fife.

Area Number of jobs in sectors most exposed to COVID-19 risks
Scotland 958,000
Glasgow City 128,000
City of Edinburgh 100,000
Fife 57,500
North Lanarkshire 53,500
Aberdeen City 52,500
South Lanarkshire 51,000
Highland 50,000
Aberdeenshire 47,500
Renfrewshire 36,500
West Lothian 30,750
Dundee City 29,250
Perth and Kinross 28,000
Dumfries and Galloway 27,500
Falkirk 27,500
South Ayrshire 22,000
Scottish Borders 21,250
Stirling 20,500
North Ayrshire 20,000
Moray 18,500
Angus 17,000
Argyll and Bute 15,250
East Ayrshire 15,250
Midlothian 14,400
East Lothian 13,500
West Dunbartonshire 12,250
East Dunbartonshire 10,900
Inverclyde 9,350
East Renfrewshire 8,050
Clackmannanshire 6,850
Shetland Islands 5,350
Orkney Islands 4,250
Na h-Eileanan Siar 3,950

Other factors, such as the level of international exports, the structure of the business base, and the existing health status of the local population will also impact on the regional exposure to the impacts of COVID-19. There were significant variations in regional social and economic outcomes prior to the current crisis and local resilience and recovery will be influenced by a range of factors, such as the existing levels of deprivation, labour market performance, and qualifications of the population.

For example, areas such as Glasgow, Dundee, Inverclyde and North Ayrshire have higher levels of income deprivation and median hourly earnings for employees in 2019 ranged from £10.79 in Dumfries and Galloway and £19.32 in East Renfrewshire[15][16]. The proportion of the population with degree qualifications also varies significantly, from 11.6% in Shetland to 50.7% in Edinburgh[17].

There is considerable uncertainty regarding the economic outlook and understanding the regional impacts and recovery paths will be important to ensuring that the specific needs of Scotland's regions are supported.