THE figures tell us the recession is over, but put the Champagne on ice. The news that the UK economy has edged back to growth – helped by the Olympics – in the last quarter may be good news but hardly cause for celebration yet.
The longest double-dip recession since the 1950s has changed the face of Edinburgh and no-one will predict what is still to come.
Many well-known businesses have closed and thousands of jobs have been lost since the start of the economic crisis, signalled by the collapse of Northern Rock in 2007 and the banking scandals centred on the Edinburgh-based RBS and HBOS the following year.
Pubs, shops and long-established family firms have been among the casualties, as well as major employers such as Hall’s of Broxburn, whose phased shutdown is about to begin.
Proposed major developments in the city, including the Waterfront and the controversial Caltongate scheme for the Old Town, ground to a halt.
Youth unemployment has soared – just last week, figures showed the number of young people in Edinburgh out of work for more than 12 months was up 285 per cent on the year before. The recession also took its toll on people’s health, with a ten per cent increase in the number of antidepressant pills being handed out in the Lothians.
So how positive should we be feeling about the news of a one per cent rise in official gross domestic product figures?
Chancellor George Osborne said the UK was on the right track, but there was “still a long way to go”, while Finance Secretary John Swinney warned of a “continued fragile recovery”.
Dr Simon Clark, head of the school of economics at Edinburgh University, said the latest figures were difficult to interpret because of the Olympics effect.
But he said: “If you take the last six months as a whole it is very modest growth. There’s not much cause for getting out the Champagne just yet.”
He said the news that Ford is ending vehicle production in the UK with 1400 jobs losses was a sign of very weak demand, especially in Europe.
“That is going to be ongoing for a year or two,” he said. “Any recovery is going to be pretty slow and a long haul.”
But Dr Clark said Edinburgh had a “reasonably resilient” and flexible economy with a well-educated workforce, and was in a better position than many other parts of the UK.
He said: “If I was a betting man I don’t think I would be predicting a triple dip, but who knows?”
THE NUMBERS GAME
UNEMPLOYMENT in Lothian increased by 102.2 per cent between March 2008 and September 2012, from 9431 to 19,073. In Edinburgh, the figure went from 5544 to 10,996, an increase of 98.3 per cent. In East Lothian, it rose by 172.2 per cent.
• More than 33,000 people in Lothian are identified as underemployed.
• Average house prices in the Capital have risen from £198,033 in January 2009 to £236,906 in June 2012.
• Business start-ups are down from 175 in 2008 to 118 in September 2012.
Convener of economic development committee
EDINBURGH was resilient during the banking crisis and has bounced back well, but in tough economic times we can’t be complacent. With growing pressure on council resources, we need to invest where we will have the most impact and creating jobs is our number one priority. Unemployment creates major social costs for the whole city and tackling this issue head on now will help us lay the foundations for a new phase of growth in Edinburgh over the next ten to 20 years.
Our new economic strategy, launched last month, is designed to invest in people and provide a joined-up service to businesses. We need to work with partners to offer the best chance to create the right conditions for new jobs.
The vision of the Edinburgh Guarantee is that all sectors of the city work together to ensure that every school leaver in Edinburgh will have the choice of a job, training or further education. It is of vital importance to the future economic health of the city that the Edinburgh Guarantee succeeds.
No one partner or organisation in the city has sufficient influence to drive development of the economy alone, so it is vitally important that we pool our knowledge, expertise and resources to ensure Edinburgh remains an attractive place to do business. We want businesses to work with us to get people in the city back to work.
Chief executive of
Edinburgh Chamber of
A STRONG economic performance is good for business and builds confidence, so the latest GDP figures will be welcomed across the Edinburgh business community.
However, the figures will also be viewed with caution. There are some sectors that continue to struggle, so while the figures represent progress, our members are under no illusions that we have a long way to go.
The hope is that these results give our business community the confidence it needs to move up a gear – there is already lots of positivity in the marketplace and hopefully the return to growth will act as a catalyst for further investment in business development. What is missing from the GDP figures is the sheer effort and drive being shown by businesses to develop new markets and create opportunity for growth. Businesses are aware of the difficult economic conditions but many have the confidence to trade through it.
Edinburgh has many leading examples of sustained success and hopefully the GDP news will re-energise the business community into yet more progress as we leave recession behind.”
Assistant secretary of STUC
THE UK’s emergence from its second recession in four years is clearly good news, but the crucial question is whether the announcement of one per cent growth in the third quarter signals the start of a period of sustained expansion.
Unfortunately, there are compelling reasons to take a pessimistic view. Over two-thirds of the growth identified in the third-quarter figure is attributable to Olympic tickets sales and Jubilee bank holidays. Longer-term economic performance is simply depressing – the OBR forecast that the economy would grow by 4.6 per cent over the last two years, but it has grown by just 0.6 per cent. Recall that nearly 80 per cent of spending cuts are still to be implemented.
In Edinburgh and the Lothians, claimant count unemployment has doubled over the past four years. There is nothing to suggest that the immediate job prospects of these people will significantly improve.