As a firm we’ve identified private business as a key growth area in Scotland and have invested in our service capabilities to ensure we have the skillsets and capacity to proactively support family-owned, PE-backed and entrepreneurial companies with ambition to grow.
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Changing demographics
Our forecast shows a decline in the working age population, both through natural change and lower migration. Net migration remains positive but has fallen consistently since 2016 when it was 32,000, this is now estimated to fall below 8,000 representing a 75% decrease.
The situation is intensified by this report’s forecast that Scotland’s total population will peak earlier than previously anticipated, in 2021 at nearly 5.45 million.
Forecast of Scotland’s Population
5.45 millionThe number of Scotland’s total peak population by 2021
Greater economic balance across Scotland
While the geographic imbalances between the North and South of England are set to widen over the next three years, as outlined earlier this week in EY’s Regional Economic Forecast, Scotland’s economic growth is more geographically balanced.
GVA growth in four out of Scotland’s seven city regions is predicted to grow at a faster pace annually in the period 2020-2023 compared with 2016-2019 (Aberdeen, Dundee, Glasgow and Perth & Kinross). While growth in Edinburgh and Stirling will ease off in the next three years, Edinburgh will be the strongest performing Scottish city and Stirling will rank in third place.
Edinburgh, Glasgow and Stirling, with an annual growth of 1.9% GVA, 1.7% GVA and 1.6% GVA respectively between 2020 and 2024, are all predicted to perform above the Scottish average pace of growth. Scotland’s two biggest cities will also grow faster than the UK annual average (1.6%) for the same time period.
Six cities are expected to experience an increase in employment annually with only Aberdeen narrowly missing growth at -0.1% per year from 2020-2024. A common area of GVA growth to all seven cities is predicted to be professional, scientific and technical activities, a sub-sector of private services.
Summary
We are undoubtedly in a significant period of change, when the 2020 transition deadline with UK leaving the EU approaches, but this typically also presents opportunities. Business and government must work in partnership to identify and capitalise on opportunities to drive continued, sustainable growth.
Any assurances or initiatives to support continued business investment and ensure Scotland retains its ability to attract talented people to the Scottish workforce could prove to be pivotal to economic growth.