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Economic commentary

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Economic commentary

Our bi-monthly update on global, UK and Scottish economic trends and performance, drawn from a wide range of economic indicators and commentaries. Published February 2020.

Modest growth expected in 2020 as UK business confidence improves

2020年欧洲杯赛程In January, the IMF released newer, slightly lower forecasts for GDP growth for 2020 of 3.3%. Growth has been downgraded across all the main global markets.

Main factors contributing to the slowdown 
  • Rising trade barriers
  • Brexit uncertainty
  • Political and economic uncertainty

Global economic trends

  • Global growth forecasts have been downgraded by the IMF
  • Growth in the US, the world’s largest economy, stayed constant. The IMF expects US trade to weaken in 2020, reflecting the impact of tariffs on some Chinese imports.
  • Growth in China, the world’s second largest economy,grew by 6.1% in 2019
  • Japan's economy shrank by 6.3%, the fastest rate since 2014, in the final quarter of 2019
  • IMF eurozone forecasts are for positive but modest growth of 1.3% in 2020 and 1.4% in 2021

Growth forecasts (%)











United States




Euro area












United Kingdom




2020年欧洲杯赛程Table 1 showing global economic growth forecasts. Source: 


UK economic trends

  • UK GDP growth flatlined at the end of 2019
  • UK business confidence rebounded at the end of 2019

Scottish economic trends

  • Scottish economic forecasts for 2020 remain modest according to forecasters - between 1.0% and 1.3% growth
  • The Scottish labour market remained strong but showed signs of weakening as employment stood at 75%
  • Our account managed companies are less positive than they were a year ago, with 77% either uncertain or negative about the Scottish economy


Figure 1 Summary of headline indicators

Figure 1: Summary headline indicators

What our customers tell us

We regularly seek feedback on current performance and expectations from our account managed (AM) companies.

Feedback was received from almost 240 companies from October to December 2019.

Turnover, profitability, employment and export performance over the last six months remain positive. 


Figure 2 showing forecast increase in company performance over the last 6 months (% of companies)

Figure 2 showing forecast increase in company performance over the last 6 months (% of companies)


2020年欧洲杯赛程Companies expect increased performance across the four indicators (turnover, profitability, exports and employment) over the next six months. However, the longer-term outlook trend compared to the same period 12 months ago is less positive. 


Figure 3 showing forecast increase in company performance over the next 6 months (% of companies)

Figure 3 showing forecast increase in company performance over the next 6 months (% of companies)


What all this means for Scottish Enterprise and Scottish businesses

Scottish economic growth has been weakening over the last few quarters and softness is now also beginning to appear in the labour market. Survey evidence highlights that the performance of Scottish businesses continues to be negatively impacted by domestic political and constitutional uncertainty along with ongoing global weakness. While the general election has helped bolster confidence in the short term, ongoing uncertainty is likely to mean subdued growth continues through 2020 and into 2021.

2020年欧洲杯赛程Growth in the global economy is slowing and, therefore, trading conditions are likely to become less favourable for Scottish exporting businesses. The same challenge applies for businesses selling to the rest of the UK.

2020年欧洲杯赛程Slower growth may impact negatively on Scottish sales, exports and potential inward investment, due to lower business confidence in markets that have traditionally invested in Scotland.

2020年欧洲杯赛程Despite this uncertain economic climate, Scottish businesses will need to take advantage of all opportunities to expand both at home and overseas. Companies should focus their efforts on:

  • Consistent improvements in competitiveness
  • Increasing productivity levels through innovation and investment
  • Continuing to look at exporting market opportunities


We release Scotland's economic commentary bi-monthly. This commentary reflects our understanding of issues at the time of writing drawn from a wide range of credible and respected sources and should not be taken as Scottish Enterprise policy.

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