- Scotland’s GDP fell 19.4% in the second quarter of 2020, following a 2.5% fall in the first quarter, with sharp falls across the services, production and construction sectors.
- More recent data for July showed that GDP grew 6.8% in July, its third consecutive month of growth, and GDP is 10.7% below its pre-Covid level in February.
Business activity returned to growth in August.
- As lockdown restrictions have eased and the economy has gradually reopened, business activity has strengthened.
- The number of Scottish businesses currently trading picked up from 80% in June to 95% in August.
- The Scottish PMI survey for August reported expansion in private sector activity for the first time since February.
- Growth in business activity was broad based, but remained slightly stronger in the Manufacturing sector.
Labour market impacts from COVID are still emerging.
- In May to July 2020, Scotland’s employment rate rose slightly to 74.3% and the unemployment rate rose to 4.6%.
- However, the Job Retention Scheme has supported around 1 in 3 workers in Scotland and around 15% of the workforce was still on furlough leave in August.
- As the scheme winds down, employment is expected to fall and unemployment to rise.
- In August, the Claimant Count in Scotland (Jobseekers Allowance and some Universal Credit claimants) was 225,800, a rate of 8.0%. The number of claimants has broadly doubled since March, a rise of over 100,000 claimants.
GDP projected to strengthen in the second half of 2020.
- Scottish Government analysis projects GDP to grow in the second half of 2020 but to fall by 9.8% over the year as a whole and for unemployment to rise to 8.2% in Q4 2020.
- In the medium term, output is projected to recover gradually back to its pre-COVID level in 2023-24.
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