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31 August 2020 | Economy

State of the Nation: Scotland in Recession


State of the Nation: Scotland in Recession

The social and economic impact of the COVID-19 crisis as Scotland fell into the deepest recession on record is laid bare in SCDI’s latest State of the Nation briefing.

Although the easing of lockdown restrictions has allowed many sectors to reopen and restart, the recovery is weak, fragile and uneven. Confidence and demand remain historically low.

An unemployment crisis looms. As the Coronavirus Job Retention Scheme comes to an end next month, unemployment is expected to surge as employers lay-off employees whose wages they can no longer afford to pay without government subsidy and as young people leave education to enter a depressed labour market.

Urgent calls for investment in a Green Recovery that kick-starts clean growth, creates new jobs and strengthens resilience are growing ahead of the Scottish Government’s Programme for Government 2020/21 (1 September) and the UK Government’s Comprehensive Spending Review (24 September).

Key points

  • Scottish GDP now 17% smaller than before lockdown after return to growth in June.
  • 80% of businesses say threat of new national or local lockdowns is biggest concern.
  • Hours worked fallen to record low as joblessness rose sharply to 4.5% and 1 in 3 employees furloughed.
  • 1 in 2 UK employees working from home.
  • 1 in 3 workers say their mental health and wellbeing has been damaged by longer hours.
  • Levels of employment in UK retail now staggering 45% lower than in August 2019 in face of lockdown and weak consumer confidence.

Download our latest State of the Nation briefing below for all of the latest data and forecasts in one place.