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Regional Review the Relative Economic Growth Also Peaks in the Year 2001

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Regional Review the Relative Economic Growth Also Peaks in the Year 2001 Quarterly Economic Commentary have figures below the SEN average are Renfrewshire, Glasgow, Dunbartonshire and REGIONAL Lanarkshire. Regional GDP GDP growth is forecast to be 2.9% in 1997 for Review SEN but only 2.2% for Highlands & Islands Enterprise (HIE). The following year sees a significant reduction in GDP growth. The peak SCOTTISH REGIONS AND THE LECS year for GDP growth is 2001 for both areas. Non-electronic GDP growth is identical for SEN Introduction and HIE at 2.2% in 1997 falling to 1.9% and 1.6% respectively in 1998. Non-electronic GDP In this Regional Review the relative economic growth also peaks in the year 2001. High GDP performance of the Local Enterprise Companies growth for 1997 is seen in Renfrewshire (5.5%), Lothian (3.3%) and Lanarkshire (3.1%) with (LECs) are examined. Regional GDP, regional Dumfries & Galloway only attaining 1.4% employment and sectoral performance are growth. The outstanding non-electronics growth described. The focus is forward looking and in 1997 is Forth Valley (2.8%). For 1998 the forecasts over 1997-2001 for each LEC are best GDP growth performances include, discussed. The strengths, weaknesses and Lanarkshire (5.1%), Renfrewshire (4.1%), Fife opportunities of each LEC are also considered. (3.5%) and Lothian (3.1%) while Ayrshire (0.6%), Dunbartonshire (1%), Glasgow (1.2%), Overview Dumfries & Galloway (1.3%) and Tayside (1.3%) have poor rates of growth. When When examining the long run trends of relative electronics are excluded in 1998 the top economic performance in the Scottish regions it performers are Lothian, Fife and Grampian. By is clear that a North-East/South-West divide is the year 2001 we expect Renfrewshire, emerging. Electronics, foreign direct investment Lanarkshire, Lothian, Fife and Grampian all to and export led growth continue to drive the have GDP growth above trend. When non­ economy. With regard to employment flexibility electronic GDP growth is considered for 2001 and multi-skilled working are becoming much then Lothian, Grampian, Fife, Lanarkshire, more important. Employment growth is focused Renfrewshire and Forth Valley all perform well. on white collar and part time jobs. There is a continuing shift from employment to self employment and females now constitute the Detailed forecasts of sectoral output growth for majority of employees. There has been an all the LECs have been made. The areas with fast overall fall in labour market participation which electronics growth include Lanarkshire, Lothian, has seen unemployment fall. The LECs with the Fife and Renfrewshire. Ayrshire and Glasgow best GDP growth performance include have a significant number of sectors with Lanarkshire, Renfrewshire, Lothian and Fife all negative growth in 1998 as the economy cools. of which have growth over 1997-2001 which Other manufacturing sectors with reasonable outstrips the Scottish Enterprise National (SEN) growth rates include Mining & Quarrying, in figure of 2.9% p.a. Grampian is not far behind Fife, Lanarkshire, Forth Valley and Grampian; the SEN average. LECs which do not perform Electricity, Gas and Water Supply in Tayside, well include Glasgow, Dunbartonshire, Borders, Forth Valley and Grampian; Paper, Printing and Ayrshire and Dumfries and Galloway. When Publishing in Tayside, Renfrewshire, electronics are excluded then the ranking of GDP Lanarkshire, Fife, Forth Valley, Grampian and growth performance changes slightly with Ayrshire and also in Other Manufacturing where Lothian, Grampian, Fife, Lanarkshire and growth is above trend in Grampian, Fife, Renfrewshire having growth which exceeds or is Lanarkshire, Lothian and Renfrewshire The the same as the SEN average of 2.3% p.a. With LECs with the greatest growth in Services regard to civilian employment over 1997-2001 include Lothian, Grampian, Renfrewshire, those LECs which do well include Lothian, Lanarkshire and Fife whereas tihe poorest Grampian, Borders, Tayside who all out perform performance occurs in Glasgow and the SEN average of 0.1% p.a. The LECs which Dunbartonshire each with growth of 2% p.a. Quarterly Economic Commentary 19 Quarterly Economic Commentary over 1997-2001. Business and Financial Services average of 16% and half of these jobs are in the show strong growth in Lanarkshire, Lothian, engineering and electronics sector. The closure Renfrewshire, Tayside and Grampian. of the Jetstream programme amongst other Distribution, Hotels and Catering have above problems was the most serious blow for the trend growth in Grampian, Renfrewshire, region. The strategy for the local economy has Lothian and Lanarkshire over the medium term. been to focus on Prestwick as an international Public Services growth is constrained in most airport, to promote tourism and to encourage areas the exceptions being Fife and Lothian. light industry in an area which has seen exports double over the last five years. The local Regional Employment officials stress that Ayrshire is a marvelous location with much improved transport links. The LECs with the poorest performance over They also have pressed SEN and the Scottish 1997-2001 for all employees on an FTE basis Office hard for more assistance but the plea include Glasgow (-7151), Ayrshire(-3349), Forth seems to fallen on empty pockets. With the Valley (-2274), Dunbartonshire (-1991), Tayside forecast drop in non-electronics output the (-1533) and Dumfries & Galloway (-1377). outlook for manufacturing looks bleak and Those with net employment gains over the economic development is a difficult task. period include; Renfrewshire (759), Lanarkshire (1293), Fife (1440) and Lothian (8240). The Growth in GDP and GDP (ex Electronics) for only LEC wim a net gain in FTE employment in 1997-2001 is 1.9% p.a. in the Borders which Manufacturing is Fife which is forecast to gain leaves it as one of the worst performing LECs in 969 jobs over 1997-2001. The worst performers this respect. In terms of ranking it has the 2nd and include Glasgow (-2859), Grampian (-1983), 3rd worst performance respectively. Forth Valley (-1791), Tayside (-1519) and Manufacturing output is the second lowest of all Dunbartonshire (-1305). Service sector the LECs at 1.3% p.a. over 1997-2001 but only employment change for 1997-2001 is an falls to 1.1% p.a. when Electronics are excluded astonishing loss of 3713 in Glasgow, a ranking Borders 9th. Services growth is 2.2% performance no other LEC matches. At the other p.a. for the medium term which is only 0.3% p.a. end of the scale Lothian adds 7697 jobs over the below the SEN average but leaves Borders in 8th period with Grampian and Renfrewshire making equal position. Employment change is 0.2% p.a. positive gains of 1476 and 939 jobs respectively. over 1997-2001, a net gain of 298 jobs for me CWE which place Borders 4th equal on the Regional Review percentage change but in absolute terms only ranks the performance as 8th best. Ayrshire has the poorest output growth (ex Unemployment over the period falls by 120 Electronics) of all the LECs and is only 9th equal making Borders the poorest performing LEC in when electronics is taken into account. The main this respect but improves slightly to the 3rd problems occur in the chemicals, aerospace and poorest performer when the percentage change textiles sectors. Manufacturing output increases per annum of unemployment is considered. by 1.5% p.a. over 1997-2001 but decreases by 0.4% p.a. over the same period when electronics Textiles is the basic problem in the Borders are excluded, and service sector growth is 2.1% where it is 15% of Borders employment and half p.a., all of which are below the SEN average. For of all manufacturing employment and exports. Manufacturing (ex Electronics) this is die worst The Borders also has 12% of Scottish textiles performing LEC. Ayrshire has a net gain of 444 employment and nearly 30% of its exports. The jobs over the medium term which is close to the region contains 2.1% of the Scottish population SEN average while the reduction in and only 1.7% of all of Scotland's jobs. The unemployment for Ayrshire is also of average acuteness of the problem is that the Borders has performance for both the absolute change and a narrow base, in fact a severely limited base. die percentage change per annum. The strategy for local economic development must be diversification. Textiles is now a highly Ayrshire has in the past contributed considerably competitive market where labour costs in ttiird to export growth delivering 18% of Scotland's world countries make competition almost nigh manufactured exports from a region containing impossible. The global industry is not going to only 8% of the population. Manufacturing did change so the Borders needs to act to help itself. represent 26% of jobs against the Scottish Tourism, electronics, agriculture, food and drink Quarterly Economic Commentary 20 Quarterly Economic Commentary are all sectors which have growth potential for the electronics sector is proving encouraging so the region although agriculture has limits to far. growth. Due to the small number of jobs available migration of the young and skilled is Dumfries and Galloway come in at 8th best for also a problem. 20% of residents are over 65 GDP and GDP (ex Electronics) growth over the years of age. These are some facts which in part medium term with growth of 2% p.a. in both mask the relatively low unemployment rate. cases. Manufacturing growth is 1.6% p.a., There is a considerable challenge for the LEC ranking 8th best, while excluding Electronics and other development agencies to boost the allows the LEC to move up to 5th equal amongst Borders economy. its peers. Growth in Manufacturing is 1.6% p.a. over 1997-2001 and does not change when Dunbartonshire has the same GDP and GDP Electronics are excluded ranking Dumfries and (ex Electronics) growth as Borders ranking Galloway 8th and 5th equal respectively.
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