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The Scottish Economy
Industrial
Performance
i ncreases
in
adversely
could
i nterest
rates
are
1i kely
affect potential investors,
have
dire
consequences
then
for
Scottish
manufacturing
activity. Also, an indirect
to
new investment could
potential
to
this
be
threat
increased
wage pressure, induced by increases in the rate of
inflation.
matched
If the growth in earnings fails to
by productivity advances then this
be
could
erode profits over the short-run thus leading to a
contraction in planned investment projects.
The
apparent pessimism of Scottish
manufacturers
does not seem to reflect actual or expected trends
in
orders or sales. The trend in the balance
orders
BUSINESS SURVEYS
Taken
together, the Scottish
and the
Chambers'
CBI's
Business
Industrial
Trends
and sales improved over the last
The
balance of new orders rose from +6% to
and
the
sales
trend in the balance of
rose
accounted
from +1% to +35%.
the
This
for
quarter.
+13%,
volume
was
of
largely
for by an increase in orders and
sales
Survey
(SC8S)
Survey
provide a reasonable guide to current
and
to the rest of the UK (i.e. not Scotland) from - 1 %
recent
trends in the Scottish economy.
are
to
Both
+5%
and
- 2 % to
+10%
respectively.
Export
conducted quarterly with the results being derived
markets continued to represent the strongest trend
from the responses of the Chambers of Commerce and
with respect to orders and sales.
CBI
members.
between
There
them,
geographical
information
provides
whilst
namely:
however,
the
differences
SCBS
provides
on
trends by size of firm;
on sectoral
employment
SCBS distinguishes between
a
Optimism
provides
varies
the
areas,
breakdown, whereas the CBI
data
the
are,
CBI
in
with
and
area
investment
well
twice
that
to the CBI Survey and it
covers
only
manufacturing
over
not
construction,
distribution
and
with
trend
took place against a
background
rising interest rates, relatively strong
and
of
sterling
a large balance of payments deficit;
despite
an optimism figure of
intentions
broadly
-11%.
Reported
reflect
regional
with
respect to investment
in
plant
investment
The
intentions and reported
trend at -14% for plant
Dundee economy is perhaps not
badly
as
general
a
casual
business
confidence
actual and
performing
of
would
appear
to
expected
orders
and
SCBS
continue to show signs of strong growth
is largely attributable to the continued
their
the SCBS
outlook
pessimistic
pessimism
balances
effects
difficult
although
as
is
in
the
pessimistic
admittedly
November
Survey.
as
optimism" is +52%.
recovery
situation
The
The
of optimism all remaining negative.
The
the SCBS, remains in a relatively depressed
are
with a balance of optimism figure of -3%, compared
that
to -23% in the November SCBS. The pessimism is not
recent
events
ascertain.
in
To
sectors
of the oil industry, in which "business
the
to
in all
not
in
as
Aberdeen
with
of
evident
remain
as
respondents
does employment. The good performance in
sales
Both
inspection
most
equipment.
indicate.
to
and
the
and
which, retail sales continued to increase.
Respondents
most
figure
equipment. Dundee however showed a marked decrease
negative
Surveys
the
divergences with Aberdeen having the most positive
in
financial institutions.
The
representing
of +27%. Glasgow proved to be the most pessimistic
respondents to the SCBS is
distribution, retail
Aberdeen
sector
Commerce
male
of
wholesale
manufacturing
optimistic area with a balance of optimism
number
also
Scottish
patterns,
female and full-time and part-time employment; the
but
the
significantly between Chamber of
the
the
economy
extent
12
Scottish construction industry, according
to
state
uniform however, as Aberdeen's balance of optimism
figure
was
sectors
+75%.
was
central
The trend in
positive,
government
orders
including
sources.
for
orders
The
trend
total employment levels.
all
from
in
the
In
the
last
quarter,
Scottish
institutions
report
both
advances
both
manual and non-manual labour. Regionally, a net of
sectors.
During
firms in Dundee are expecting a decline in
advances
to the personal sector are
levels
from
of employment was also positive
central
whereas
are
government
and
a balance of - 4 % of
expecting
for
private
sources,
Glasgow
a decline in other
orders
respondents
public
sector
orders. The factor most likely to limit output
the
Scottish construction industry was orders
sales,
mentioned by 41% of firms. A
skilled
labour
factor
with
shortage
likely
the
second
most
skilled labour was the
reason.
factor
limit output in Aberdeen,
that
institutions
and
in
the
Scottish
retailing
sector
recovered slightly in the February SCBS,
although
still remains pessimistic with a balance of
18%.
Sales are still buoyant, with a net of
of
firms reporting an increase in
this
retail
sales,
corresponds to figures indicating that
interest rates policies are failing to
-
+66%
high
discourage
retail spending. Employment rose for a net of
+3%
of retail respondents, but prospects are poor with
a net of -26% of firms expecting total
to
signs of optimism with general
situation
current
personal
quarter
however,
expected
optimism figures standing at
showed
+10%
reflect
recent
expectations
of
investment
become
Scottish
course,
demands; although this trend will
for
several
months.
investment appears to be fairly buoyant with a net
+79%
of
financial
increased
demand
companies.
The
distributive
from
corresponding
trades,
construction
institutions
for credit
sectors
reporting
manufacturing
figures
other
for
were +23%,
+59%
and
credit
appears to be being demanded
for
working
is suffering. However, there was an improvement in
the demand for credit for buildings and plant
CBI Industrial Trends Survey
Business
confidence
about
the
prospects
industry declined for the fourth
balance
Edinburgh
Glasgow
being
four
November
the
positive
of +46% of firms reporting
rose
for
respondents
during
a
the
with
increases
level of sales; this was true for all
Employment
balance
about the general
business
a
in
to
sizes
retail
Survey.
balance of +17% of respondents reported a rise
and
A
in
No
full-time
the
in
current
employment
the
are
during
the
four
months
orders
was
to
December.
Although small firms did report an improvement
growth of new orders, while medium and
reported
falling
demand.
reported
part-time employment however, is expected to
four months.
fall
in
large
Sectorally,
'textiles' and 'food, drink and tobacco'
an increase in the total new orders over the
a net of -14% of firms. Employment
less
in
expected to increase for a balance of respondents,
for
for
being
January than was the case
growth in the volume of total new
recorded
firms
and
showed
except
October Survey.
+8%
total
sectors
' metals and metal manufacture'
optimistic
the
in part-time employment. During
of firms and all
'textiles', 'chemicals', 'food, drink and tobacco'
total employment, +20% in full-time employment and
quarter,
October
compared
-11% in the January Survey. The Survey
all
less
situation
areas.
of
the course of the
for
Survey
in succession. Respondents were, on balance,
SCBS. As with the retail distribution sector,
was strongly
and
machinery.
Scottish
chambers was - 3 % compared to -38% in the
sales
+25%
capital, suggesting long or medium term investment
and
pessimistic. The balance of optimism for all
of
and
respectively. Unfortunately, however, much of this
than was the case four months ago. In the
volume
the
services
Survey the balance of optimism was -32+,
and
and
not
Actual
slightly
and Dundee
extent
financial
The prognosis for Scottish wholesaling activity is
optimistic
rates
the
are validated, there is, of
apparent
optimistic
being
these
interest
during the past months. To
the
retailing
firms returned balances of -57% and -42%.
with Aberdeen
to
are
business
+25% respectively. Dundee and Edinburgh
different
their
and
employment
fall. Regionally, Aberdeen and Glasgow
definite
corporate
likely to be knock on effects on both consumer and
of
Optimism
the
financial
increased
to rise less quickly. Presumably,
expectations
or
Edinburgh.
it
expected
of
A
the
they
and advances to the corporate sector
increases
most
Dundee
decline
in
important
29% of firms giving this
of
to
was
shortage
to
that
past
prospects
for Glasgow wholesalers are especially pessimistic
Output growth picked up since the previous Survey,
with a net of -40% of firms forecasting a drop
despite
in
13
the
expectation of a
decline
from
the
October
Survey. A balance of +14% of
respondents
reported an increase in the volume of output.
previous
balance
reported
a
months
was
0.
The
chemicals
distinct improvement
to
December
while
over
'metal
The
sector
the
four
and
metal
'metals
and metal manufacture' on the other
reported
reductions
sectors
with
in
employment
the exception
of
hand
levels.
All
'chemicals'
and
'other manufacturing' are expecting reductions
in
employment levels.
manufacture1, 'textiles' and 'other manufacturing'
indicated
a fall in output levels.
increase
Despite
in output in relation to demand,
this
stocks
of finished goods declined.
A
balance
at
a
faster
previous
The main constraint on output is still a
shortage
of orders or sales with -77% of respondents citing
this
factor. Plant capacity remained
most
cited constraint to output, being
by
+18% of respondents, up
from
highest
figure
increase
in
October
of spare capacity
demand.
reporting
in
between
that
levels
The proportion
of
April 1981.
average
prices
at
of output below
'other
manufacturing'
meet
capacity
rose
manufacture'
reported
the
most
significant increases in spare capacity.
the fourth Survey in
intentions
much
the
is
the
rate
of
The
which
domestic
the Survey, although not
as had been expected. A balance of
four
by
as
+18%
of
respondents reported an increase in prices. A
net
succession,
investment
have been revised downwards
machinery, partly reflecting
Increasing
efficiency
frequently
cited
on
lower
capital
expenditure,
this
continues to be
reason
with
for
plant
capacity
growth.
the
reason. Expansion
of
of
by +36% of respondents and
reflecting the revision
Optimism
about exports reached its highest
Increased
firms
confidence
was reported
by
and by all sectors apart from
metal
manufacture.
since
Export
the
order
previous
of
capacity
was
replacement
by
with
books.
Prices remain the most important factor likely
authorisation
of
respondents.
+45%
of firms cited uncertainty about demand,
from
+34% in the October Survey. The
over
the
next
Political
or economic conditions
abroad
remains
the second most cited factor.
Summary
Both
the
report
CBI and the SCBS surveys
a
pessimistic
outlook
continued
towards
most
to
limit
months
of internal finance with +13%
of
to
business
although there was an improvement
in
from the previous surveys. The firms
do
remain fairly confident about orders
and
employment
expectations.
up
third
likely
twelve
to
limit with +66% of respondents citing this factor.
however
investment
and
have
Survey
sales, but are rather pessimistic over
important factor to limit the
shortage
size
books
most
was
all
respondents indicating above normal export
confidence,
factor
firms.
'metals
An inadequate net return on investment remains the
cited
point
since April 1976 with a balance of +32% of
optimism
frequently
the
respondents
+46% of respondents.
capital expenditure for +49%
of
most
authorisation
+78%
partly
price lists at the beginning of the year.
improved
utilisation and expectations of no demand
of
for
+46%
fixed
respondents
from -43% to +45%. 'Metals and metal
giving
since
case
of
are booked also picked up during the
increased
and December with the result
expected
cited
the
balance
prior to
capacity is on balance more than adequate to
and
than was
The
orders
quarter,
For
rate
Survey.
months
+12%
in
of +39% expected prices to rise during the current
degree
and
rise
second
October.
The
a
mentioned
the
by +25% of firms. A shortage of skilled labour was
cited
of +46% of firms reported
costs with average costs per unit of output rising
is
Primary
a
firms
AGRICULTURE & FORESTRY
mentioning this.
Despite
October's
employment
manufacturing
respondents
The
employment
a
in
decline
in
Scottish
firms rose for a balance of +2%
during the four months
'chemicals'
strongest
expectation of
levels,
to
sector continued to
employment
growth over the
of
December.
report
past
the
four
months while 'textiles', 'other manufacturing' and
The new president of the National Farmers Union of
Scotland,
wasted
Mr
no
John Ross, from
Wigtownshire,
time in setting out his aims
has
for
the
future. His most important item is to ensure
a
"decent settlement" is achieved at
E.C.
farm
price
fixing,
by
this
putting
that
years
maximum
pressure on the government. Secondly, he wants
14
to
continue
the
marketing initiatives,
at
present
marketing Scotland's pig industry, into the
2. They
sheep
can
be
renewing
used
as
"pioneer"
crops
old pasture and as a cover
game.
the finances of the Scottish NFU which have been a
kale, are sown specifically for game,
cause
it is usual for most of the crops to be managed
concern of late
and
reassessing
the
services they offer to farmers.
some brassica
crops,
for
and beef sectors. Thirdly, he will be looking into
for
Often
when
crop
especially
however,
so as to maintain some cover until the shooting
season is over.
He
made
years
that
despite
last
£63,000 deficit the union is
strong reassurances
nowhere
near
bankruptcy.
president
opposed
There are "massive reserves" and
the
will be looking at "priority areas"
as
to
any
major
restructuring
of
the
consensus
that
for another year on
main
3. Swedes
and
are available for the unfinished
lambs
will facilitate the purchase of long
keep
store lambs in the autumn and the finishing
of
ewes.
organisation.
4. The variable costs of growing brassicas
Within
the
E.C. there is
prices
should be frozen
broad
from
barley)
commodities. Many ministers want other measures to
be
taken
to alleviate the "plight"
European
farmers,
possibility
year.
of
many
of
whom
of
the
the
in opposing the proposed extension of the
suckler
process
and
dairy
gradual
herds. It is strongly felt that such a move
would
be open to fraud.
£57
an acre
(kale
due
varied
winter
to
more
a
much harder and
more
organised
selling
will be necessary in order to obtain
increase
in
prices
needed
to
production costs in the 1990s. Scottish
the
meet
producers
will need to carve out their own niche market
will
The phasing out of the variable premium for
lamb
after
If the future for UK sheep farmers is to be secure
then
to farms with mixed beef
(rape
real
coming
Britain
premium
an acre
expensive seed).
The Netherlands and Denmark joined
cow
to
£35
Southern
see
actual price cuts in
about
prime
has made the immediate future uncertain
for
the
require to balance and control the
product on to the market to take
and
flow
of
account
of
seasonal and continued demand.
producers in spite of the hoped for emergence of a
pattern
of
seasonal
price
trends.
This
will
necessitate a more market orientated approach from
The rationalisation of E.C. abattoir standards
by
1993
UK
will
likely force the closure
of
many
producers for both finished lambs and store sheep.
slaughterhouses
At
also likely to be pressure from the retaile-s
present no one can say for sure whether it
best
to market lambs early or to hold on to
is
them
for as long as possible.
This
uncertainty is of course going to
place
and
lambs
over
this
the
away from rape in order to
until the spring. An
towards
keep
alternative
is the stocking of rape in September as
case
in
the
past.
Former
convener,
Mr
Jim Sharp, talking
NFU
at
that
growing
he could cite four
100
main
the
to
was
livestock
the
British Grassland Society's conference at
said
an
although
crop balance will have to swing more
swedes
-
This
leaves
number
abattoirs
sector,
and
an
already
powers.
co-operation
in
the
concentrated
This should
between
of
producers
force
the groups and
of
retail
a
closer
could
well
increase a greater joint marketing programme.
for
swedes,
The
Fraser
has
recently
of
Sporting
for the British Association of
Shooting
completed
Shooting
Development
output finished on the farm).
impact
from
crop by marketing later in the season
the
as
of Allander
Institute
a survey of the Economics
upland/arable, sheep and beef with the majority of
lamb
decline
leading to further erosion
bargaining
and
improve the returns
producers facing a
of auction marts, a drop in the number
recent
Peebles
reasons
acres of mixed brassicas
help
is
for
the vetting and preparation of lambs to take place
kale and fodder rape: (Mr Sharp's farm is hill and
1. Brassicas
There
in large meat plants.
important role on brassica fodder crops,
the
in the next few years.
Conservation
(BASC)
and
the
Agency (SDA). This survey
of game shooting on the
Scottish
shows
the
Scottish
economy
generates a revenue in the order of £28.6
million
annually.
properties
less
than
half
rated for sporting
sporting shooting and
the
shooting
with
number
of
actually
well as the last ewes which are poorly marketed
used
on many farms.
demand it is surely a viable diversification.
15
for
With
increasing
The
government
has
announced
that
beef
and
countryside".
poultry farmers are to be fully compensated (100%)
critical
for
pioneered
animals
suffering
encephalopathy
has
from
bovine
spongiform
(BSE) or "Mad Cow Disease"
colloquially
become known.
There
as
is
it
still
In
of
and
inspection
control
a
the
recent report*
way
some
followed
prior
to
pollution
the
projects
through.
There
the payment
from farm
NA0
have
of
is
been
is
no
grants
waste.
Since
to
1980
great concern that the disease which has killed in
nearly £1.6 billion (£2.4 billion) at 1988 prices)
excess
have
of
10,000
cows
could
infect
humans.
However, Mr Tim Lang, director of the London
Food
been
spent
agriculture,
on
about
structural
75%
support
from the
E.C.
to
Commission pressure group said compensation should
remainder from Britain. The NA0 is concerned
exceed 100% "to give farmers a positive
a
incentive
to hold back from slaughter any animal about which
they
have
incubate
from
Cattle
can
the infection (which is thought to
the
come
infected
showing
slightest
sheep
doubts".
offal)
for
years
without
symptoms. These animals are entering
the
greater effort should be made to
schemes
UK
and
the
that
evaluate
like the environmentally sensitive
new
areas
introduced in 1987. It suggests that, for example,
the
new
£50 million programme
to
control
pollution should set targets for say, a
farm
reduction
in the number of pollution incidents recorded.
food chain but the Government believes the risk to
human
health
infectious
are
is
minimal by
removing
the
most
organs. At least 150 new cases of
reported
every
week
and
the
BSE
Agriculture
Minister, Mr John Gummer says that this number
expected
to
ministry
has commissioned research
continue
rising
until
infected
mothers
can transmit
is
1993.
into
BSE
The
whether
through
the
The passing of a resolution, backing the continued
use
of pesticides, at the recent NFL) meeting
seen
as
a
However,
and
rejection
of
"green"
the 1000 member British Organic
Organic
Growers Association
decision was out of step
is
agriculture.
said
Farming
that
the
with public opinion, the
placenta to their calves. Calf brains are excluded
trend in government policy and with retailers
from the offal ban and are permitted for sale.
wish to secure increased supplies of organic food.
Changes
in the regulations under the
to
Health
control
Substances
Hazardous
are
of
importance
to Scottish dairy farmers. It
of
prime
There
is
certainly a high
regarding
is
not
which
quite clear where a farmer would stand should
one
supermarkets
of
his
employees
claim
to
have
contracted
for
have
Safe
cancer
works.
fungicides
Leptospirosis has been common among
dairy
outbreaks
have
of
been
"milk drop syndrome"
sporadic
and
of
and
little
concern.
However, the main cause for
that
can
it
dairymen,
passed
on
to
abortion
cause
for
concern
humans,
is
cows. This manifests itself in
illness
with fever and
joint
a
from
"flu-
pains
with
gradual recovery. However, in severe cases it
cause
meningitis and can be fatal.
would
be
screening
may
Therefore
wise for dairy farmers to
it
instigate
programme to demonstrate that they
a
are
doing all they can for their workers.
of
aid
for
structures,
"has
assess the impact of support
able
in
by Friends of the Earth and
are
like
maneb, mancozeb
Parents
linked
The
zimeb
are
and
by the US Environmental Protection
carcinogenic.
However,
the
to
States.
Agency
Ministry
of
Agriculture said recently that it had no plans
to
restrict their use.
The
World
Forestry
judge
Wide
Fund for Nature
says
that
the
Commission should no longer be the
of
forestry
applications.
This
sole
was
in
response to recent Scottish Development Department
proposals
for
forestry
regions
to
prepare
strategies. The WWF said
indicative
that
forestry
development should take more account of the
needs
of
separately
the
farm
to
The
WWF's
Scotland,
forward
assistant
conservation
officer
Mr Martin Mathers said: "The
for
UK forestry is
through
on
present
system could be tightened up in order
to
level of farm incomes, on the maintenance
of
give the statutory bodies a more positive role
in
Favoured
Areas or the conservation
of
the
decision making.
16
suggested
sustainable
farming,
and efficiency of British
on
He
for
way
resource
or
management".
only
the
structure
Less
been
improvement
measure
the
not
the
of
bought
of local people and of conservation.
The National Audit Office in trying to assess
effects
confusion
residues
foods
and are banned in the United
banned
as
of
mainly
infected after contact with urine
excretor
like"
be
and
been found in some
Food. These fungicides
Leptospirosis from the cattle with which he or she
cattle in the West of Scotland for many years
degree
the safety of pesticides,
who
that
the
The WWF made five recommendations:
cod
and saithe. The final agreement,
reached
the European Commission in December, was a
1.
Indicative
forest strategy
should
consider
forest quality as well as location.
by
little
better than first valuations suggested. The quotas
are
though, according to Scottish fisherman,
far
short of what is needed to sustain the industry on
2.
The
UK should set an overall target for
the
size and nature of the forest estate.
a
commercially viable basis. Britain's quota
North
Sea
haddock
for 1990
is
36,300
for
tonnes,
compared with 54,500 for 1989 and 128,000 in 1988.
3.
District
Councils
should
include
woodland
planning in local plans.
4.
The
The incentive system should be redesigned
to
Mr
encourage
on
estimates
multipurpose
woodlands
improvement agricultural lands.
Indicative
the
strategies should
industry
used to
towards creating the
steer
type
of
the quota cuts
is
Allan of the Scottish Fisherman's
thus
very
for
example that
the
Federation,
haddock
quotas
the existing fleet. Given this
situation,
a
serious problem exists with regard to excess fleet
capacity
and
it
is
major
falls
in
income.
fishing
will of course rise as catches fall,
(Prices
woodlands society desires.
very
unlikely that this will
be
but
a
full
compensating factory).
FISHING
Statistics
issued recently by the
Agriculture
the
of
represent only half of one year's worth of fishing
for
8.
magnitude
dramatic.
value
vessels
Department
and Fisheries for Scotland show
of
fish landed into
Scotland
by
in 1989 was £245m, 3% less than in
Quantity
of
that
UK
1988.
landed fell by 8%, while prices rose
by
5%.
Meanwhile,
volumes
the
and
combination
stricter
threatening
to
push
of
hygiene
the
reduced
catch
regulations
financial
is
problems
"downstream" into the fish processing industry
Scotland.
As
a result, the industry
is
in
seeking
government financial aid.
Demersal
showed
(white
fish) landings,
in
particular,
large volume falls, although
produced
some
offsetting
incomes.
Volumes
price
effect
of landing
falls
Construction
rises
on
fishing
for
various
species were as follows: haddock down by 25%;
Construction output
<t 985-1 ea>
cod
by 11% and whiting down by 2%.
Pelagic species in total showed a small (4%)
in
value
terms between 1988 and
1989.
fall
Mackerel
volumes fell by 7%, whereas herring rose by 9%.
Shellfish
value
in
terms
although
total exhibited
little
between the two years
change
in
in
question,
in general it was the case that
volumes
75 _|
,
,
,
,
,
,
. 1978 1980 1982 1984 198* 1988 1990
of landings fell whereas average prices rose.
The
major "event" affecting fishing
since
been
the previous issue of this
in
the new arrangements for allowable
Reductions
in total allowable catches
various
species
showing
a serious problem of stock
arose
from
Scotland
Commentary
has
catches.
(TAC)
scientific
for
advice
The
latest
Scottish
Chambers
Business
Survey
(SCBS) shows that respondent firms have reported a
present
capacity rate of utilisation of 84%.
balance
of optimism for respondent firms is -3%;
this from a position in the previous quarter of
depletion
in
23%. So a further 3% of respondent firms are
community waters. The problem is not a new one
of
optimistic
course
and fishing quotas have been reduced
(for
The
about the overall
business
less
situation
than they were three months ago.
certain species) in earlier years.
The
Species thought to be in jeopardy include haddock,
expected
government,
17
trend for new orders
other
public
sector
from
central
and
private
sources all exhibited positive balances of 17%, 8%
quarter in Scotland there was an increase of
and 16% respectively. This compares with an actual
in
trend
again
These figures put Scotland third in the UK
large
the
for
the
respectively
preceding
+11%,
three
+15%
and
months;
+14%.
A
proportion
of respondents exhibited no change
the
in
trend
new orders for
the
future
in
three
house
employment
balance
that
the
actual
trend
balance
in
in the last three months was up for
of 30% of firms whilst future
employment
for
of
the
a
next
further
three
19%.
changes of +40.5% and
annual
+33%
showing
respectively.
Halifax regional house price index
as
stated
behind
North and the North West of England,
The
2.7%
26.3%.
of
paints
a
broadly similar picture although Scotland is shown
months than the preceding three.
Respondents
prices and an annual figure
months
This
a
trends
in
show
a
increase
having
an annual growth of only 17.5%
fourth quarter rate of 2.8%. Both indices
still show that house price inflation in
Scotland
be as severe as those experienced in 1989.
is
There
manual
supplementary
and
a
has reached its peak and future increases will not
expected to be met by increases of manual and nonemployees for a balance of +16%
and
however
+10%
respectively of all respondent firms.
has
Glasgow
been an increase of
housing
District
£3.5
capital
million
in
allocations
Council for
the
for
current
year
1989/90. Of this amount, £1.0 million will be used
The
SCBS
shows
experiencing
labour,
that
Aberdeen
problems
indeed
in
and
Dundee
recruiting
are
skilled
this has been cited as
the
main
limit to output in Aberdeen for both this and
the
on
the
Council's
million
will
support
for
own
housing
be available
to
stock
and
enable
important projects
in
£2.5
continued
co-operation
with the private sector.
previous SCBS.
State
EEC
harmonisation, in preparation for
of Trade Enquiry for February 1990 shows that 45%,
led
to
42%
undertaken
The
Building Employers Confederation (BEC)
and
43% of Scottish
difficulties
firms
reporting
in securing bricklayers,
found
carpenters
(8SI),
an exhibited future trend
in
work
progress for a balance of 42% of respondents.
limiting
factors
orders/sales
for
in
41%
output
and
by
are
in
The
ranked
shortage
of
as
level
off,
but
the
high
beginning
capacity
to
utilisation
figure shows that it is levelling off at a
fairly
funding
is
UK
prosperity
of
the
Scottish
is seen as being supported
to
the
South
of
and
users
in
uniform
made available for this in
order
to
such
had
an
orientation and has been active
in
(Contractors),
organisations as FIEC
(Consultants)
years.
CEDIC
and CEMPC (Manufacturers) for
These and other associations are
many
actively
the need to ensure that legislative
parameters
of
post
1992
and
business
promote
by
enterprise. The single European Market will affect
relative
England.
direct
Despite
slowdown in new private commercial development
is
experts
construction
stability of the home ownership market, in
contrast
Institute
organisations,
construction industry has always
regulatory
industry
has
being
give British firms an equal opportunity.
pursuing
high level.
The
Standards
research
technical
1992,
work
throughout Europe. It is essential that government
The
curve of new orders is
British
by
of
to make key technical requirements
international
rising
amount
skilled
labour for 29% of respondents.
The
the
supported
order
is
considerable
manufacturers,
and plasterers respectively.
There
a
hoped that its relatively high level will
a
all
rather than inhibit fair competition
British civil engineering contractors
and
to
at
least some degree.
it
act
as a catalyst to further investment.
The present buoyancy in the construction market in
Scotland
is giving little incentive to
firms
to
seek and develop other community markets. However,
High
interest
rates are of course
beginning
to
it
is in the best interests of
bite on two fronts, firstly affecting the decision
civil
of
language.
clients to build and secondly the cost of
the
company
price
Nationwide
index
for
Anglia Building
1989 shows that
Society's
for
Indeed,
Engineering
constructor of financing the project.
The
engineer
the
house
last
to
learn
the
every
another
Federation
individual
community
of
Civil
Contractors is suggesting that
should consider the appointment of a
every
"Mr
or Ms Europe" to oversee their own involvements in
and effects of the Single European Market.
18
Proposals
for
a
Single
European
Time
Zone,
could be £3.7 billion this year compared with £2.5
however, have a number of serious disadvantages to
billion
Scottish
participants
Scottish
industry.
If such proposals were to
they
would
working
peak
the
construction
hour
which would add
year.
In a
Development
detailed
Agency has
report,
the
predicted
that
effect
total
offshore expenditure on the UKCS
the
winter
£5473
million in 1990 at constant 1989 prices,
significantly
traffic both in the
last
take
lead to an alteration in
hours
evening
in
morning
to
and
and hence increase the likelihood
could
be
a
real increase of £808 million from last year.
the
of
an
accident.
While a "mini-boom" in offshore activity can
be
beneficial
some
concern
indigenous
Energy
to oil-related
capacity
has
been
industry
expressed
that
the
oil supplies sector does not have
to
meet a rapid
expansion
in
the
demand,
leading to a significant proportion of new
OIL AND GAS
only
onshore,
orders
going to foreign competitors.
According to the Royal Bank/Radio Scotland
North
sea
oil output in December
1989
index,
averaged
1.96 mbpd, a fall of 2.5% compared with
November.
The
primarily
short
term decline in output
attributable
was
to a reduction in Brentfield
COAL, ELECTRICITY AND OTHER ENERGY
Coal. & coke output
<1985=108)
output
of 37,000 bpd.
Over 1989 as a whole, the average daily volume
oil
output was 1.85 mbpd, 20% less than in
However,
on
offshore
accidents, output volume should
the
assumption
of
no
new
major
1988 levels this year. However, in
of
fall in output volume
the
in
in
1989,
average
previous year. This was because
average
200 -
spite
output value was £1.12 million higher
the
400 -]
recover
towards
daily
of
1988.
than
(a)
the
dollar price per barrel increased by
22%
0 1
1
1
1
1
1
, 1978 1980 1982 1984 1986 1988 1990
and (b) sterling depreciated against the dollar by
8%.
The
revised
timetable
for
electricity
privatisation indicates that the Scottish
Crude
oil
prices continue to
exhibit
short-run
volatility, albeit around higher mean prices
many expected a few months ago. In early
than
January,
Brent crude reached a four year high of $22.50
pb
boards,
now stripped of their nuclear generating capacity,
will
probably
be floated in May 1991.
This
after the English distribution companies
in
the
autumn
of
this
year
and
is
(discos)
the
English
before falling back to $19.65 pb within two weeks.
generating companies in the spring of 1991.
Analysts expect some further easing of prices over
much of the preparatory work on the sale still has
the
next
few months as the
Northern
hemisphere
moves from winter into spring, typically
reducing
to
be
recent
indicated
upturn
in
resulting
months
a
number
of
reports
that this year could see a
offshore
activity on
benefits for the onshore
have
significant
the
UKCS
oil
with
supplies
sector. For example, a recent survey of North
operators
by the Financial Times
suggested
exploration/development drilling in the UK
sea
that
that
bring flotation into the
Remaining
In
it appears
the
revised
timetable is now fairly firm, as any further delay
would
the demand for heating oil in particular.
performed,
therefore
problems
be
more
and
election
period.
uncertainties
likely to be
would
resolved
than
the
extension of the
sale
period.
While
structure
of the post-privatisation
industry,
sector
From
important decisions will affect their asset
drilling
rigs
In
on flotation.
January,
Energy Minister Peter Morrison
that
development
expenditure in
the
a
number of such problems remain.
95
the
a
sale
progress has clearly been made toward defining the
This would be sufficient to keep an average of
throughout
by
reduction in the asset value realised by the
could be at least 18% higher in 1990 than in 1989.
active
While
year.
forecast
North
Sea
the Scottish suppliers' point of
19
upgrading
two
price
Both refer to the opportunities for
'exporting' power to England.
the
view,
of
the
The first
physical
link
concerns
to
allow
surplus
While
electricity
to be exported
to
England.
final decisions have not yet been taken
upgrading,
the
Hydro Board has begun
to
on
export
This
change of direction is likely to
the
result of the retention of
within
using the existing connection.
the public sector.
have
been
Scottish
Nuclear
leaves
Scottish
This
Power and Scottish Hydro-Electric more akin to the
English
power
structure.
Other •rwrgy and wattr supply output
(1985=188)
industry
distribution
The
in
Scottish
One
privatisation
glasnost
of
the brighter
their
nuclear
is therefore still subject to
decisions.
125 -i
companies
future of the
political
spots
of
the
process has been the new policy
regarding
nuclear
costs.
of
The
two
Scottish power boards have written off these
£lbn
of costs in the year just finished with regard
the
closure
of
Hunterston 'A'.
the
uneconomic
Magnox
These are made up as follows.
addition to £188.8m of direct costs to be
off,
upward
revisions to
,
,
,
,
,
,
1978 1980 1982 1984 1986 1988 1990
The
second
area
conditions
of
of uncertainty
competition
in
refers
the
to
market
industrial electricity south of the border.
is
the target market for Scottish exports,
cially
are
as new independent generators
in
privatisation.
is
capping prices to large industrial
as
for
decommissioning
after
customers,
This is
necessary
the large users have been cross-subsidised
by
consumers for many years through not having to pay
for transmission and capacity charges and
coal stations.
customers
point
to
lowest
Eventually, prices to
are likely to rise by between
40% in real terms.
From the Scottish
large
20%
costs
(ie
recurrent
is
excluding
costs)
in
£38m.
The
the
compare
in England and Wales of £600m a time.
fuel
with
for decommissioning CEGB nuclear
a
stations
While
this
figure is higher than the Scottish numbers, it
also
possible that the greater efficiency of
Scottish
nuclear
is
the
the
dis-
However, it is entirely possible
that
industry
crepancy.
is responsible
for
costs both north and south of the
border
have still been considerably underestimated.
The
purpose of writing off existing costs was
allow
the
non-nuclear sections of
the
power
industry to be floated relatively
debt,
the
resale of Scottish nuclear energy and
in new generating
costs
price
increase
and
of view, the limitation on price rises
Investment
SSEB's
generators'
tread a fine line between reducing profits
early
and
The
BNFL
through
receiving dedicated power generated at the
cost
figure
£350m.
nuclear
increase
England
During this period, the government
those purchasing at least 1MW.
to
recurrent
espe-
unlikely to produce for the first year
come
the
This
As well as
sum, additional fuel costs from
rises
costs
operational
wastes at the station come to £158.5m.
this
In
written
decommissioning
total £143m and the costs of treating
75 _j
to
station
has
on
encouraging
capacity
by
independent producers.
further
taxpayers picking up
the
free
bill.
increase in costs will be borne
to
Scottish
of
Any
both
by
electricity customers, in the form of the 'nuclear
tax', and the taxpayer.
The 'nuclear tax', levied
on fossil fuel power generation, has now been
set
at
the
10.6% of final electricity prices, though
government states that it is expected to fall over
The Scottish producers are therefore hedging their
time.
bets
combined
as
England.
to
their ability
the NSHEB and soon to become
Hydro-Electric,
'independent'
in
export
is
involved
in
consortia considering
one
in the area (from which
section on the iron and steel industry).
well
to
be that the Scottish producers will
be
Board,
Scottish
of
part of rather than compete with
'independent' producers in England.
two
The
deliver
government
heat
less
and
has
power
than
also
decided
that
(chp)
which
stations
50% of their
output
to
national grid will be exempt from the levy.
the
These
stations are both economically and environmentally
comparatively acceptable.
boost
in
the
England.
see
the
environmentally useful is that not to require flue
It could
attempt
the
new
to
independent
This decision will be a
gas
stations on Teesside to burn North Sea
industry
to
constructing
a project connected with developments
steel
power
In particular, the present Hydro
officially
power
to
One
generators,
decision
notably
which
is
gas desulphurisation of coal plants.
in
not
so
While older,
smaller plants where the investment required would
not
be
economic
are largely
in
England,
this
reduces the potential market for Scottish power.
20
The
government's price freeze,
to,
also applies to smaller industrial users
consumers.
already
referred
Consumer prices will rise by
nonetheless. It is expected that in 1992, with the
and
single
European market and the breaking
slightly
tariff
barriers, consolidation and
down
of
concentration
more than inflation in April, followed by rises in
will
speed
the
this
notion. It has been argued that excise
duty
on alcoholic drinks will remain a barrier to
free
next two years pegged to inflation.
industrial
real
Smaller
and commercial customers may see
decline
in their power costs.
some
This
is
a
rather disappointing result, given the decline
up. There has been one
criticism
of
trade.
in
input costs, especially coal.
In
Manufacturing
further
Britain
the
brewing
challenge.
The
industry
is
Monopolies
facing
and
a
Mergers
Commission has recently suggested that brewers who
FOOD, DRINK AND TOBACCO
own
Food i n d u s t r i e s output
(1985=108)
more than 2,000 pubs should either
or introduce other beer brands.
likely
to force brewers to concentrate on
is
either
brewing
or
selling
its
division to concentrate on retailing
and
it
is
retailing. Whitbread is
the
This
spirits
expected
Scottish
and
Guinness
110 -i
sell
surplus
that
Bass,
only
Newcastle
will
don't own pubs and
Whitbread
and
Courage
remain
Grand
Allied-Lyons
and
brewers.
Metropolitan,
are
likely
to
concentrate on retailing.
100 Drink and tobacco industries output
<1985=100)
90
1978
A
recent
1
1
1
1
1
1
1980
1982
1984
1986
1988
1990
160
the
drinks
120
report
has proposed
that
industry is currently facing two major challenges.
The
first
of these has arisen from the
Governments
and anti-alcohol groups
fear
that
of
people
80 -)
are drinking too much. As a result there have been
1978
a number of campaigns pointing out the ill-effects
on
health
of alcohol misuse. This
could
sales
of alcohol as people become more
these
effects.
groups;
has
the
big
Seagram, IDR, Allied-Lyons and
been
misuse.
Group,
The response of
to
1
1
1
)
1984
1986
1988
1990
In late December Allied-Lyons purchased the
of
and
drinks
spirits division of Whitbread,
company
Guinness,
free
activities.
to
concentrate
Elders
IXL
the
on
wines
leaving
its
Australian
brewing
company
The aim of the group, called the
Portman
Britain is about to re-acquire 5,000 Courage
promote
better,
more
expensive,
for
brands that people should drink less of.
which
owns
the Courage
beer
that
retailing
alcohol
to
to
1
1982
tackle
is
set up a group
damage
aware
1
1980
group
in
pubs
£250m. This may be the first step towards
asset
swap
with Grand Metropolitan.
Elders,
this deal went ahead, would exchange the pubs
The
second
challenge
consolidation.
takeovers
The
facing
the
industry
198G"s has seen a
and like many other sectors
of
there
has
been a tendency towards fewer, larger firms
are
more
international
in
their
however,
other
They
a number of joint ventures which may or
currently involved
including
beer brand they
in
talks
Anheuser-Busch
currently
wish to settle the future of
with
whose
distribute.
their
brewing
investments by spring.
Distribution is the key to gaining a foothold into
been
are
parties
Budweiser
which
outlook.
foreign markets and, as a result, there have
also
may
Grand
Metropolitan
are also in
the
process
not result in takeovers. The globalisation of beer
buying
markets
negotiating with the Max Cointreau family for
has
been
slower
but
is
if
for
Grand-Metropolitan's breweries. Grand Metropolitan
is
number
an
proceeding
21
a
minority stake in
Remy-Martin.
It
of
is
its
49%
share
Cointreau
goes
in Remy-Martin and its
which
ahead,
19% stake
in
are soon to merge. If the deal
a 20%
Grand Metropolitan will have
for
by a substantial (23%) fall in the volume
illustration of the industry's increased
share of the merged company at a cost of £100m.
because
Control
activities.
have
220
bought
pubs
Belhaven
from
Breweries,
Grand
Metropolitan
bringing the total of their pubs to 770.
are expected to rise by 15,000
sales
and
barrels
Control Securities
Belhaven
to
20,000
lowest
It
is also worth
strength
value-added
the
industry's
noting
the total
nominal value of whisky exports rose by 14% during
1989,
reflecting
the
improved
prices
which
producers are now receiving.
are now widely
Total whisky production
L i t r e s oP pure alcohol - thousands
regarded as one of the top three regional brewers.
have negotiated a deferred payment
They
bulk exports are the
most controversial aspect of
and
Securities, who own
of
bulk blended exports. In many ways this is another
for the
pubs with initially only £7.5m being paid in cash.
Grand
Metropolitan
Control
shares
get
will
£5.85m
worth
giving them a 2.5% stake
of
150000 -]
in the
HA/X
company.
100000 -
Vu
A G Barr, the soft drinks manufacturer, has shown
better
than
expected year-end
pre-tax
profits.
YVVT/YF
50000 -
They are only £400,000 down on last years' despite
. MM|
V
the company having suffered a number of setbacks.
High interest rates forced up repayments on
money
borrowed
to take over Mandora St Clements,
water
problems
at
two plants affected
rationalisation
While
problems
interest
problems
rates
production
were
also
remain
high
been resolved and
have
and
prevalent.
the
a
other
good
1
1
!
1
1
1
1978 1980 1982 1984 1986 1988 1990
summer
boosted sales by 15% and annual turnover by 8%.
At
the time of writing,
HM
Customs
Holdings,
the
Dundee
based
company,
setting up a new plant in Glenrothes at a cost
on
&
Excise
and
whisky
between
the Scotch
Whisky
over production levels for the third
Association
of 1989. Nevertheless, there seems to be
quarter
Alma
information
is confused by a disagreement
production
is
little
doubt
of
increased sharply, and total output for 1989 will
that
production
has once
again
£7.1m. This will replace the Stockport plant which
be between 15% and 20% higher than 1988's level of
was destroyed by fire and will employ 260 people.
329.9 million LPA. Production levels such as
1,300
are employed
people
by Alma
Holdings
world-wide and 1,000 of these are in Scotland. The
company
is
recognised as the third
confectioner
Dobson
since
its takeover
largest
of
Sales
are
expected to exceed £60m.
The
most
important, and in
of
piece
&
for the calendar year
figures
1989 give
Mackay. Gallaher, the US-owned
group,
Walker
for
£160 million.
to
Gallaher's
Total
exports
actually
1.4% down on 1988 at 242.5
(litres
of
industry,
bottled
alcohol),
masks several
rose
malt
exports,
by
but
million
the
encouraging
3.6% during
LPA
overall
features.
the mainstay
of the
the year,
exports growing by 4%,
were
a
with
somewhat
less spectacular growth rate than of recent
years
bottlers
this
inability
find
Burn
Stewart
apparently
to
1979 when
since
Whyte
the company
Had Whyte & Mackay returned
to
control
the proportion of Scottish
owned
distilleries
in Scotland would have
for the first time in a decade,
overall drop in exports is totally
accounted
by
Scottish
risen
but
interest in the industry has
&
time
was acquired
Lonrho.
25%
led to
Scottish control for the first
whisky
above
instead
increased.
Interestingly, Gallaher's move into Scotch
The
the
move. The disappointing aspect of all
is the opportunity lost to return
Mackay
American
but nevertheless very welcome.
The
necessary funds for the buyout coupled with a bid
from
blended
the
Brent
whisky
performance
saddest,
tobacco
evidence of the improved position of the
Bottled
ways
now bought Whyte & Mackay from
further
pure
some
news in the last quarter has been
has
Scotch
industry.
a
decade.
failure of the proposed management buyout at Whyte
WHISKY
Export
this
the industry for nearly
UK
Barker and
and Squirrel Horn and Keiller.
not been seen in
have
whisky
runs counter to the recent trend which was towards
22
US companies withdrawing from the industry. Before
and
the
the
September 1989 while for Great Britain as a
the
employment
only
purchase of Whyte & Mackay, Seagram held
sizeable
industry
North American
following
the
interest
in
withdrawal
of
both
metals sector has been stable in the year
earlier,
recovered
having
to
its
declined in
position
early
to
whole
a
year
1989.
This
Publicker Industries and Hiram Walker.
indicates that Scotland is not managing to pick up
This is not, however, the only important change in
England, especially Greater London, by
ownership
increased
sector employment displaced from the South East of
recently.
mentioned,
James
As
the
last
Burrough
commentary
Distillers,
which
includes Long John, was put up for sale by
owners
Whitbread. The buyers in late December were Allied
Distillers,
the wines and spirits arm
of
Allied
labour
regionally
and premises costs and
by
the
impending (in England) Uniform Business Rate.
The fall-out from the privatisation and the change
in
nuclear policy continues to
affect
prospects
Lyons, which has become a substantial force in the
for
industry
with heavy exposure to nuclear power that have not
with its existing Wm Teacher
and
Hiram
the power engineering industry.
Those
firms
Walker connections. Allied will now control around
taken evasive action are likely to face
17%
while there is at least the potential for benefits
of
the world whisky trade,
second
only
to
Guinness.
to
firms
nuclear
with experience
plants.
during
in
problems,
constructing
The UK market for
of
the
to
decision not to insist
desulphurisation
15
The size
market has recently been reduced
government's
Mechanical engineering output
< 1985-190)
plant
the 1990s has been estimated at up
000MW, representing some eight stations.
MECHANICAL ENGINEERING
non-
power
by
on
the
flue-gas
for all coal-fired power
plants
after the privatisation of the electricity
supply
industry.
This will not only have
implications
both
desulphurisation
generating
environmental
but also mean a loss of
equipment
desulphurisation
plant
to
is
orders
for
also
for
and
replace
uneconomic.
plants
The
where
upside
is
comparatively lower electricity prices.
Of
SO -\
1
,
1
1
1
1
• 1978 1980 1982 1984 1986 1988 1990
the
Scottish firms that
damage
by
the
have
policy
Sizewell
'B', have the
potential
The downturn in the economy as a whole is only now
boilers for fossil-fired stations.
beginning
valve
to
affect
sector.
the
The
Scottish
Scottish
mechanical
Chambers
Commerce
Business Survey still
balances
of responses for new orders,
employment.
outlook
The
pattern
is
reports
positive
well
and
Within this picture,
the
rapid
depreciation of the pound at the end of 1989.
One
to
in turnkey non-nuclear
from
enter
Power,
projects,
are currently that the
the market.
In
larger
particular,
able
which have won a major supply contract
the
Swedish-Swiss
to
the
Lakeland
North West of England, are dominated by
American
based engineering
firm.
construction firm Bechtel are
build
a power station on
behalf
of
British
is
engineering firms, spurred on by the 1992 process,
concerns
expressed by the CBI at
reflects
national
level
of
European
toward
integration
This
number
The
cause for concern noted by a number of respondents
a shortage of skilled labour.
a
in
ABB,
scheduled
It is likely that the recent drive
of
of
scale
the
Coal.
the
their
continental and American producers have been
capacity
reflect
benefit
the
However,
the view over exports is brighter than that for UK
may
to
indications
and,
This
ought
experience
notwithstanding the optimism regarding output
orders.
House,
the
reflects
orders, the level of demand.
to
While John Brown, a subsidiary
and
This
existing
Trafalgar
build
Hopkinson
for
balance of responses for investment is down.
adequate
The
subsidiary of Weir is also exposed
policy change.
boiler
to
sales
similar
for the next three months.
of
for
Babcock
International, which won the order for the
for
engineering
potential
change,
power
has not yet finished.
about the availability of trained staff.
The
The
employment level in the Scottish
engineering
reported performance of
engineering
23
Scottish
companies has been greatly
mechanical
improved.
Howden's
interim profits have increased by
to £7.1m, with a number of divisions
to profits.
£1.7m
For Ferranti, however, the price has been the sale
contributing
of
In particular, Howden's are supplying
its
assets.
project.
was
1990.
The sector is seen generally
hence
the
purchase
consultancy
Hong
drilling
strength of the radar division.
the
some
American
being
over
3-4
years.
being
The
market for power generation is
positive
implication,
domestic
over
this
market.
the
next
few
been
shows
a
Other
subsidiaries
is
seen
de-emphasis
on
a
a means of
prime mover.
in
the
securing
the
total
GEC
Because of its
have
desire
to
capability
to
its future by selling its sonar
further
division,
as
based in England to a French company Thompson
By
for
£32m.
be
financial
The UK government
UK Ferranti have also sought
secure
the
are
as
retain an indigenous radar development
North
years.
stroke
has accepted this fact and indeed appears to
In the power engineering sector,
£20m
a
a necessary condition for the contract to
Kong
Also in
at
company's
It appears that the acquisition by
awarded,
flue-gas desulphurisation project at Drax
worth
the
buoyant,
division, a £3.3m investment is
made in Renfrew.
a quarter of
as
Fedco for up to £1.91m.
tunnelling
the
of the
of
division which will
about
four tunnelling machines for the Danish Great Belt
These are to be delivered by the end
radar
remove
The reduced Ferranti group now
CSF
plans
to issue shares to cover its outstanding debts.
also
attracting investment: the Craigton plant is to be
refurbished
to
hold Howden Compressors
and
Electrical and instrument engineering output
(1985=188>
ADC
Fans.
Other
industry developments include the
purchase
200 -i
by Anderson of the remaining 48.8% of the American
firm
National Mine Services at a price
of
$20m.
John Brown Engineering have also reported positive
results, making a strong recovery.
develop
its
water
and
100 -
The firm is to
sewerage
engineering
capabilities in Glasgow and Clydebank.
ELECTRICAL AND ELECTRONIC ENGINEERING
0 -)
,
,
,
,
,
,
, 1978
1980
1982
1984
1986
1988
1990
sell-
The remaining worries surround the Ferranti
Following an enormous amount of behind the
scenes
bargaining, the beginning of the year brought
welcome
announcement
that
Ferranti's
the
supply the radar systems for the European
(EFA), a decision which
the
company's
until
the
will
defence-related jobs
end
of the
decade,
been
sold to GEC.
surrounding
the
There
in
along
was
the possibility of
West
attempting
in
German
is
in
such vital work to a
so
are
GEC sale.
other
any
following
GEC also owns Marconi,
the
radar manufacturer of note,
UK's
but
the
benefits
of keeping control of a vital defence interest
the
the
UK
outweigh
competition
doubt
in
any
adverse
in
implications
the radar industry.
It
for
appears
highly unlikely, therefore, that there will be any
winning
referral
with
to the MMC, although this move has
suggested by Labour MPs.
particular
the
involved
company
basic
development work on the EFA
in
Scotland will undoubtedly make
done
whose
likely
been
Secondly, the fact that
has
been
it
more
that any rationalisation which follows
in
GEC's radar interests will occur at Marconi, which
pressing the case for a German-manufactured system
was responsible for GEC's loss of the NIMROD radar
(the
contract
originally
Indeed,
threatened
(while
radar and whether there
simultaneously
MSD).
uncertain
in
job implications for Scotland
government has clearly accepted that the
division
severe
to stress the lack of wisdom
awarding
future
the
only
Scotland
side
Ferranti
government
to
fighter
order following its acquisition of ISC,
the
possible
safeguard
simultaneous announcement that the radar
had
competition
radar
division has finally been awarded the contract
aircraft
off of its radar division are the implications for
the
to
West
fit
German's
the
had
alternative
some
years ago.
Overall,
it
can
be
cautiously concluded that the electronic sector in
system to its own planes, leaving the whole future
Scotland has done better than appeared possible
of
few months ago.
the
ESA
project in doubt.
They
retreated from this position and accepted
have
now
a
instead
a guarantee that they will not be responsible
for
Elsewhere, some notable developments have occurred
cost overruns.
in
24
the modular telephone market, which
has
been
growing
In
strongly over the last couple
early
1989
companies
DTI
of
it was announced that
the
was
granted manufacturing licences
by
the
cost
will use phones produced at Phillips
Kirkcaldy
(a
Plessey)
joint
venture
factory
Now GPT
between
has announced that the
success
at
present,
possibility
of
future
sales
as
importantly,
and
further
there
new
however,
is
and
sales
is
secure
a
strong
employment
continue
to
in
the
expand.
the
at
GEC
continual
of the system produced there will
jobs
disappointment,
of
in Dunfermline (see QEC March 1989).
70
years.
3
Most
announcement
Motorola that it is to invest £100m at a plant
but it is known that the
company
overwhelmingly concerned with finding a
production
base in Europe, and
"it
lowis
at
least debatable whether Scotland should choose
to
offer only financial support to inward
investors.
It is germane to point out that Scotland retains a
major
of
package of attractions, not least the
a
well-established
Indeed,
Conner
have
electronics
indicated
fact
industry.
that
the
major
factors which attracted them to Scotland were
provision
the
of an advanced factory, the quality
by
the
labour
force
and
in
established supplier base.
the
existing
of
of
an
In addition, locating
West Lothian which will produce mobile telephones.
in
The
large number of major customers, particularly SUN,
reported 1,500 jobs involved will be a
boost
major
for the area around Bathgate, which
had
a
major disappointment recently with the decision of
the
Secretary
of
State
to
refuse
planning
permission to use the old British Leyland
as
a
major leisure/shopping
have,
the
Kilbride factory which
conductors
has
integrated
in
understood
small
developed
and
semi-
produces
over
time
into
an
design
and
addition to manufacturing.
It
is
that the Bathgate factory wi11 have
design team in addition
and
Motorola
Scotland
operation responsible for
marketing
while
speculate
operation
of
centre.
of course, a long history in
East
factory
it
is impossible
on
the
future
to
at
stage
to
of
the
development
in West Lothian, the company's
devolving high value added
Scotland
suggests
implications
history
responsibility
that there could
be
to
positive
for both the quality as well as
Compaq
some
and
sense,
investment
IBM.
All of these factors
due to a legacy of
of
are,
previous
in
inward
in electronics in Scotland and
it
this
which other peripheral areas of the UK
hard
to match.
attract
a
is
find
Scotland cannot be
expected
to
all major inward investment
projects
in
electronics,
but
it will continue to
attract
a
stream of them.
CHEMICALS & MAN MADE FIBRES
a
manufacturing,
this
Irvine will place it within 40-50 miles
the
level of employment.
The
latest
(SCBS)
firms
are
business
ago.
Scottish
Chambers
Business
shows that a balance of 46% of
This
decline
less
optimistic
situation
shows
about
the
than they were
a marked
Survey
respondent
general
three
months
continuation
of optimism. In the previous
in
SCBS,
20% of respondents were less optimistic than
were
when
answering
the
same
the
only
they
question,
three
months ago.
The
Motorola
decision
is
important
in
other
respects, especially when seen in conjunction with
the
announcement
by Conner Peripherals
that
will build a facility in Irvine which is
to
create
another
1,500 jobs.
Both
of
image
of Locate in Scotland and
inward investment, a possibility
which
glen".
Such claims were bandied at the time
major
of
decision last year and when
Corporation
announced
semi-conductor
that it was
"silicon
the
to
manufacturing
Ireland instead of Scotland.
Business
Survey
% Balance
to
would
the
Wang
expansion
Chambers
Quarter 1:90
Quarter 4:89
compete
threaten
the
continued
Scottish
Chemicals & Man Made Fibres
the
also
calming fears that Scotland is failing to
in
Table 1
these
announcements will go a long way to restoring
public
it
expected
of
Intel
locate
facility
Balance of Optimism
-46%
Trend in Orders
-25%
-20%
15%
Trend in Sales
-26%
30%
Trend in Employment
-58%
4%
a
in
As was noted at the
The
trend in expected new orders and in
expected
time, however, the Wang situation arose because of
sales in also showing a marked disimprovement
problems
a
within
the
company
and
it
was
not
balance
reasonable, in our opinion, to infer that Scotland
firms.
was
respondent
in danger of becoming the wrong location
electronics
plants.
Intel
was
a
for
major
this
25
of at least a
Whilst
is
the
quarter
balance
is
of
positive
firms expected new orders
more than negated by a
for
respondent
and
strong
for
sales,
negative
balance of -63% and -42% for expected new orders
and sales respectively, t o outside the United
Kingdom.
will
disregard the environmental consequences
government
legislation
conservation
Respondent firms are expecting t o run down t h e i r
stocks of finished goods and raw materials in the
next quarter with negative balances of -17% and
-22% respectively.
of
its actions. The smart company should not wait for
saving
to
measures,
before
as there is
be made as well as
adopting
a
the
financial
environmental
considerations.
Recycling
and re-use: chemicals can be
recovered
from the production process and re-used.
Chmicals and man Mad* Fibres output
<1985-1 ee>
Separation
of
toxic and non
toxic
waste,
allows most wastes to be recycled and
thus
facilitates
a waste audit to be undertaken.
125 n
Equipment
will
modernisation
keep
and
regular
spills of chemicals to the
inspection
minimum
-
simple good housekeeping.
100
Process redesign: the introduction of closed
loop
systems in order to prevent waste.
75 i
1 —i
1
1
1
1
1978 1980 1982 1984 1986 1988 1990
Input
substitution:
accomplished
Capacity
for
utilisation stands at an average of
81%
e.g.
degreasing
by the use of a water and
can
be
detergent
compound rather than chlorinated solvents.
respondent firms whilst a balance of -58% of
firms
responding
foresee a
reduction
in
their
Product redesign: it may be possible to replace an
next
existing product with one that can be manufactured
seasonally adjusted employment needs for the
three
months.
reduction
is
employment
The
brunt
of
this
employment
being met by reductions
with
a balance of
-59%.
in
However,
balance of 47% of firms are expecting a
using a less toxic production method.
female
a
reduction
The
foregoing are all worth considering
and
may
increase profits as well as company image.
in male employment.
TEXTILES, FOOTWEAR, LEATHER & CLOTHING
It
is
apparent
continuing
with
a
to
that
high
interest
be a disincentive
negative balance of
rates
are
for
investment
-78% of
respondent
firms
revising their investment
plant
and
equipment downwards. It is
intentions
story
for
investment in buildings
quite
so marked with a balance of 21%
a
for
similar
although
not
showing
a
downward revision.
The current changes in Eastern Europe represent an
opportunity for investment in this sector and many
companies
are aware of the substantial
that
be
may
represented
afforded to them.
in
every
Eastern
ICI
potential
is
already
European
country
except Albania, although they are awaiting
market
moves before committing large sums.
This quarter's results from the Scottish
Chambers
Business Survey are slightly less pessimistic than
Britain
and
us
is still seen as the Dirty Man of
Europe
it is not a great triumph that it is to
eight years to stop the dumping
in
the North Sea.
of
The
take
those of three months ago with only a balance of 11%
of
responding firms
less
optimistic
about
untreated
their business situation. This figure in the
tide
survey (December 1989) was -68%. The trend in
sewage
sludge
turned
and it is now a brave company indeed
has
that
volume
26
of
new
orders and
sales
has
last
the
continued
downwards
for a net of -6% and -11% of
companies
respectively. The orders and sales least
affected
hoping to increase their quotas under the existing
MFA
by 60% and 16% respectively. There have
been
are exports outside of the UK. The downwards trend
calls
rather
than
is
affected
existing ones being relaxed. It was restated
that
finished
jobs
+17%
of
closer to 100,000 than the governments estimate of
to
be
30,000 and there has also been discussion over the
expected to continue and has already
the
trend
in the volume of
stocks
of
goods
which
has risen for a balance of
firms.
It
is thought that this is likely
ongoing
of
over the next three months for a
+24%
of respondents. 77% of all
balance
firms
asked
believed falling orders and sales are most
likely
to limit output over the next three months.
for
stricter import controls
lost from the abolition of the MFA would
level of textile imports into Britain and the jobs
already
lost as a result of
import
penetration.
Small
and medium firms are said to have
most
-
especially
those
in
the
a
downwards
last
three
trend in total employment
months,
employment
to
a
balance
of
rise over the near
over
+10%
countries.
These
A recent report has indicated that the UK
industry is facing increased European
results are also less pessimistic than those noted
and
in last quarter's Commentary when a net of -40% of
price
firms
the
expected the downwards employment trend
continue.
Female
affected
with
employment has been
the
a balance of -39% of
to
worst
respondents
reporting that this had fallen.
war at the lower end of the market.
1980's
became
an
and
sales
those
have
forced a number
of
reactions
involved. A number of textile
groups
increased.
and the expected abolition of
Fibre
Arrangement
(MFA).
There
committee formed to act on behalf of the
composed
of
Kingdom,
West
six industrialists with
Germany,
France
in
to
from
be
a
industry
the
and
increased
from
European and US companies have been attempting
Multi-
to
away
resulted
gain a foothold in the British market.
European
the
is
taste
have
near
long
market
and
in
tights
from
Regular
single
Changes
patterned
demand
stockings
as
industry
issues such as the
and
competition
Western Europe are joining forces to represent the
on
tights
a
During
important fashion accessory. Prices were high
expensive
issues facing the textile sector in the
future
hosiery
competition
reduced demand, the result of which may be
decreased
The
in
developing
the
expect
future.
suffered
sector
competition with low cost imports from
While a net of -43% of responding firms have shown
be
United
Italy
Commentary readers will be aware
running
discussions concerning
of
the
the
merger
proposal between Coats and Tootal. The latest news
is
that
these have broken down even
Monopolies
though
and Mergers Commission agreed
the
to
the
that
the
Merger in October last year.
each
having one representative.
The
Chief Executive of Tootal has said
companies failed to agree on a price even although
There have also been reports of a restructuring in
the
the
to
Coats
valued
world
offer
has been for £315M. Tootal are
industry
remain
or
as
textile
companies
attempt
become more competitive in
the
rationale for a merger remains. In
bad
has
been
a
shift
towards
higher
products, diversification and the use of
more
versatile
productivity
quality
labour
at E395M but
May
their
1989
recent
aware
that
the uncertainty which has lasted now for a year is
market.
There
Tootal
is
production
essential
and
smaller,
units.
costs
expensive
less important although
has decreased. The greatest
high
renders
in
Europe
fear
been expressed over the abolition of the MFA
though
the
indicated
Economist
Intelligence
that imports from developing
for
market
their business given
conditions
and
have
the
current
decided
to
poor
remain
independent and expand into the Far East.
Raised
products are more in vogue. This
employment
value
Unit
has
even
has
countries
into developed ones are lessening.
It is expected that Coats will still sell its
share
of
Gutterman as well as
its
UK
20%
domestic
thread interests in the hope that at some point in
the
near
Deputy
the
future
textiles
shares
began
talks will
be
resumed.
Coats
Chairman blamed the present poor state
have
market
for
the
breakdown.
fallen since
the
merger
of
Coats
proposals
and it has suffered a fall in interim
pre-
tax profits from £76M to £55M.
A
conference organised by the General,
and
that
Municipal
Boilermakers Union in Hawick expressed
textile companies in Poland and Hungary
fears
are
Dawson
International
the
knitwear
group
have
announced an 11.4% increase in half-yearly pre-tax
27
profits to £23.5M. This has resulted partly from a
was
restructuring
expected to produce cashmere knitwear for export.
of
particularly
have
the group and partly
from
the
cold winter. In the past year
put into receivership. Murray Allen
are
now
there
been redundancies and short term working
at
PAPER, PRINTING AND PUBLISHING
most of its companies resulting from a combination
of
high
cashmere
prices,
supply
problems,
materials,
offset
poor
quality
higher
raw materials costs and the
affecting
tastes
the
US market.
In
raw
prices
strong
addition,
away from this kind of product
Paperi printing fc publishing output
C1985=100)
to
pound
fashion
compounded
125 -,
the problems.
Four
divisions
-
one
each
for US interests, spinning and weaving,
fur
fabrics
Each
and
cashmere, knitwear and
division
market.
It
have now been established
fine
will concentrate only on
is hoped this
will
yarns.
its
own
rationalise
the
business
side. New lines are being introduced
well
shops selling knitwear
as
public
(Ballantyne
and
direct
Pringle).
75 -)
.
as
to
The
100
1978
1
1
1
1
1982
1984
1986
1988
1
1990
the
knitwear
The results of the latest Scottish Business Survey
company is also benefiting from new investment and
indicate
Dawson is now more confident about their place
optimistic
the
1
1980
knitwear market as well as the future of
in
the
than
market itself.
that
a
net
- 3 % of
about the general
firms
are
business
less
situation
three months ago. This is despite the
in both the volume of new orders and sales
trend
rising
for a balance of +31% and +13% of firms. While the
James Seddon, the Manchester based shirtmaker
gone
into
1,200
receivership and there
jobs
at the four Scottish
is
fear
plants
may
has
upwards
that
orders,
be
lost.
trend
a
downwards
the
is expected to
net
- 3 % of
continue
respondents
trend in the volume of new
near future. Non-UK orders and
for
new
expect
sales
a
over
export
sales
have shown the best results - a balance of +35% of
Throughout
January
merger
talks
to
reports
indicated
the company was
encourage
that the
involved
investment.
Denny
plants
were
Buyers
are being sought and there has
interest
to close with a loss
and
expressed
in
the
of
Mayfield
450
jobs.
been
Mayfield
factory
interests.
It
to
expand
their
Denny
the
Scottish
is hoped that the company
firms
have increased the volume of
their
can
be
sold as a going concern.
healthy
trend
is expected to continue
A number of companies have changed hands over
the
past
the
is
process of selling the majority of its
to
a
single buyer for £32M.
division
The
in
businesses
home
textiles
has been sold separately. Coats
has
agreed to a management buyout for
for
its
Nottingham
Group
-
the
Viyella
£27M
cash
schools
and
hospitals equipment subsidiary since their
policy
is now to concentrate on the textiles and clothing
market. A buyer has now been found for the Borders
knitwear firm Murray Allen securing its 125
Union Cashmere beat off another two firms to
the
next three months.
The trend in total employment is downwards with
of -21% of companies reporting this.
balance
downward
trend
is expected
to
continue.
jobs.
take
over Murray Allen after its parent company Oakwood
a
The
Male
employment has been the worst affected - a balance
of
months. Walter Alexander
This
over
-17% of firms have shown a decrease
in
employment while only a net of - 7 % have
three
non-UK
orders and a net of +55% their export sales.
some
and
factories. The US Russell Corporation may buy
Mayfield
in
Later
male
indicated
that female employment has been falling.
A
balance
of
investment
+30%
of
intentions
companies
upwards
have
for
revised
plant
and
equipment and a net of +17% for buildings. For 27%
of the firms this has been to increase efficiency.
A
recent
report has highlighted
the
extent
to
which the pulp and paper industry has been growing
in
response
Between
fast
enough
Prices
28
1982
to
a
large
increase
and 1988 output rose
to
cope with
the
for pulp are now on record
in
demand.
although
greater
as
not
demand.
increasing
for
thirteen consecutive quarters.
This has
fed
into paper prices.
decrease
taken
to
remain competitive in the world market will be
in
profitability.
The steps
of
vital importance in the near future as competition
Investment
in
a
new
pulp
order
paper
capacity
demand,
must be on a large scale and, with
planned
advance.
When
capacity
considerably.
in
to
mill,
increase
considerations,
in
or
meet
at least
operation a
new
sharpens in the face of a possible downturn.
increased
two
cost
years
mill
Before new
to
in
raises
capacity
is
At industry level the actions of companies in
the
face
the
of
increased competition are shown
speculation
which took place throughout
supply
Serla
deal,
is
advantageous for Metsa-Serla in terms of
into
not
will
effect
there
tend
until prices are rising
to
be
that
be encouraged, there is an
investment
inevitable
lag. It is often the case that demand is
to
be "choked off" by rising prices at
time
as
the new capacity is
market.
brought
starting
the
same
onto
the
This results in spare capacity
industry goes into decline.
high
cost
they
are
and
At such a time
producers will be hardest
in a position to
which may be sustained.
time
shoulder
the
older
December
over the £263m takeover bid for UK Paper by Metsa-
constraints followed by rising prices and since it
brought
by
the
Finnish forest
had
it
integration
producer
The
since
products
ahead,
it
group.
The
have
been
would
is, in the
vertical
main,
a
while UK Paper manufactures fine
combined
larger
gone
company would also have
been
in the current highly competitive
City
pulp
paper.
much
market.
analysts however, expressed a fear that
company was selling too cheaply.
hit
unless
land
any
losses
independent in 1986 after a management buyout from
This produces a spate
of
owned
Bowater
by
the
the
They argued that
company,
which
became
Industries for £38m, was undervalued
and
mergers and takeovers as companies try to even out
that the benefit to Metsa-Serla of owning UK Paper
profits and losses in pulp and paper production.
was
greater
than
Although it had
The
paper industry at the present time
that
it
decline
has
be on the verge of
kind
new
capacity
slumps
an
effort to iron out
cycle
that
is
the
production.
As
the industry is also
international
materials
a result there
to
and
take
new
time
in
paper
Paper that pre-tax profits for 1989 would be
£15m
pulp
prices, in fact at the interim stage for 1989 pretax
profits had increased by 9.5%.
many
more
organisation which UK Paper wished to be
cheap
raw
areas.
suggested
deteriorate.
alongside
safest
vertical
UK Paper would remain independent.
for the company.
in
Europe
Britain
there
has
been
a
high
level
of
mills
but
imports
more
the success
still high.
of
these
It is hoped
mills
will
foreign
fall.
One optimistic sign
there
have been
a
number
are
considering
a partnership
with
UK
paper
joint
a
It is felt
that
the market is less buoyant now than
been
and
cost
increases onto the consumer resulting
that it is no longer possible
Metsa-Serla
match
city analysts
had
Fletcher
been
proved
Services
FINANCIAL SECTOR
Reedpack
Daishowa
Japanese owned Canadian paper company.
to
the
Paper
that
of
ventures between Uk and foreign firms eg
theirs
at
UK
with
import
is
companies are now investing in
and
-
produce newsprint paper.
The
a
£299m
They are interested in expansion
increase
correct.
situation
offered
their increased offer since
not
large
that
recent investment coming into effect
levels
mills
despite
are
did
Challenge.
restructuring into a smaller number of very
of
involved
Challenge,
as well as diversification
they
accepted
In
sell.
kind
The
very quickly when Fletcher
Zealand pulp and paper group,
moment
integration.
that Metsa-Serla were the
with and that under the new deal the management of
remain in business should the market
Size and new technology are seen to be the
Paper
Metsa-Serla offer and urged shareholders to
been
other
further
The UK
Chairman however stated that he was happy with the
New
bankruptcy
This
strengthened the analysts argument.
changed
against
offering.
- down from £19m in 1988 as a result of high
Takeovers have taken place as each company vies to
guards
were
becoming
of
in
and
they
He
have
advantage
markets
of
There
booms
prevalent
mergers
and
a
'soften1.
the market is starting to
been
aware
the
A lot of
recently been brought into effect at
when
has
could
described above.
is
what
been suggested by the board of UK
it
to
has
pass
in
a
1992 is currently a popular subject of concern for
the
press
anxieties
Financial
subside
29
and
and
the
financial
complaints
Services
attention
Act
community.
with
and
has focused
regard
its
on
to
As
the
ramifications
the
possible
implications
of
a
single
European
market
for
Scotland. The picture is far from clear. Community
directives are not always what they seem.
having
constructed
the UCITS
Collective Investment in Transferable
for
Securities)
Directive
as a response to the
forms
which portfolios of securities
in
Despite
(Undertakings
widely
different
may
be
with
the
the
the
investment
trusts
although
myriad of Unit Trust type vehicles
covered.
No
recognised
doubt
such
from
that
deficiencies
are
will
at a later date with modified
or
be
new
the
is
reinforced
Scottish
de
by
the
Equitable
Scottish Equitable and Royal
that
exclude
view
that
has
acquired the remaining Kuwaiti stake in the
appears
to
This
announcement
moved
economic function is little different
Banco
is more likely to enable control to be retained in
Scotland.
sold in the Community to the public, the Directive
their
Royal Bank's Spanish partner
Santander, suggests a cautious growth stategy that
having
already
last
October
closer with the announcement
they were to form a life
aimed
at
business
assurance
providing life assurance
to
the bank's
Bank,
company
and
customers.
pensions
The
massive
write-offs of Third World debt by the London-based
UK
banks
continues
to
keep
the
domestic
UK
Directives but at the moment a substantial part of
opposition weak and possibly make the London banks
the Scottish fund management industry is not in
a
position
to
benefit from
despite
a
great
deal
possibilities
offered by
trust)
in
funds
Community
of
wide
interest
in
closed-end
some member
a
sales
the
(investment
counties
such
as
Italy.
target for takeovers pre 1992 but there
particular
banks
are
implications
to
of
the
content,
proposed
form
directives
is
Concerns
is
Bank
Indeed,
not
European
have
been
desperately searching
send
for
bank
experiences
but rather is widespread and makes forecasting
National
necessarily be a
of
bad
Bank
suggests
by
thing?
the Clydesdale now owned
Australia
owners can in some cases revive institutions
benefits to all.
Edinburgh
and
centres
other
European
the
larger
The Bank of Scotland is safe enough with
markets such as London, Paris and Frankfurt with a
Life
consequent decline in employment and the
go
arise
services
offered.
Financial
collecting
together of financial institutions
one
centre able to offer a variety
from
of
the
be
Standard
as its major shareholder and appears set
on
growing.
Standard,
been
Long term
mergers
Bank of Scotland and the
between
witness
the
connections
unravelling
in
recent
years
of the London Clearers with
formal
banks as the needs and concerns of the banks
changed,
Scotland)
centre,
is
a
thought to
represent
a
result of the diversity of
services available.
financial
perhaps
more
centre
mean
a
financial
reduce the position of regional financial centres.
of
to London, or slower growth in
see
why
firms
loss
have
but in any event it is difficult to
generally
such a regionally based
conglomerate
should
and
The decline of Edinburgh as a
could
of
regional
centre
Typically Edinburgh (or
have
distant,
no
all.
to
the
Halifax
suggested but the prospects appear
definition of what constitutes a financial
at
to offer all services and indeed
in
services.
There is no requirement that the centre should
able
with
secondary
could lose out to
centres
the
foreign
some of the consequences of 1992 for Scotland very
financial
a
The
by
that
difficult. One concern that has been expressed
that
the
partners.
would the acquisition of the Royal
confined to those relating to financial investment
is
no
Scottish
appear sufficient at the moment to
and
of
jeopardy.
the
in the leveraged buyout business but the losses do
Royal
as
in
to believe that
expressed at the role and exposure of Charterhouse
not
Uncertainty
reason
jobs,
financial
A second important financial activity in Edinburgh
revolves
around
managers.
the
independent
investment
The attrition in the investment
trust
employment and services than other centres but
we
sector
must ask if there is any particular reason why
we
would be foolhardy to believe that equilibrium has
should
expect 1992, in particular, to bring
about.
The
loss
London
has
decade
and earlier.
to
believe
of head
office
been a perennial fear over
a
single
market will make this more likely.
the
reverse.
European
acquisition
Banco
de
The move of the
markets,
the
There appears little
that the move to
to
last
reason
European
Indeed,
Royal
its most recent
this
functions
quite
Bank
most
fund
acquiring
new
managers
pension
have
fund
been
and
it
active
unit
business. The boom does not appear to be over
could
certainly lead to
throughout
move
of a stake in a Portuguese bank,
the
positive
co-operation
although
in
trust
yet
although a change in Government or market collapse
the
in
stopped for the moment,
been reached until discounts narrow still further,
and
is
Comercio e Industria,
move
into
has
substantial
contraction
the UK fund management industry.
to more open financial markets should
feature
for this sector. Low
The
be
a
costs,
a
pool of trained talent and good telecommunications
30
are positive incentives for growth only marred
the difficulties of transport to European
and
even
these are
announced
exaggerated.
laying-off
settlement
NatWest
of
procedures
staff
in
The
recently
money
with
by
is not a reliable indicator of
securities
have
concerned
Edinburgh
by
centres
County
prospects
in the fund management sector.
houses in London in the
in
life
the foreseeable future?
The
growth
on
based
offering
centre
is
the
Life
Assurance
companies.
commentators would regard the larger
as
under
been
Few
institutions
any sort of threat although
there
has
some concern, fuelled by the takeover of
Assurance,
decline.
that the smaller companies may
concerned would not appear to be a
to Scotland's role as a
given
slowly
Such a decline whilst a problem for
offices
threat
FS
the
prospects
major
financial
and recent
the
centre
growth
of
the
in Europe.
to
succumb
polarised.
strongly
The life managers on one side of
the
term
value
The European life
require
a
short
for
planning,
should
of
will
knowledge
no
doubt
going
time
to
Success
and
help
a
will
control.
but
beware the creation of giant
be
industry
It is not
period
from UK-based insurers.
Acquisitions
managers
conglomerate
insurance companies operating in all the countries
of
the
Community despite
very
different
local
and conditions. 1992 is unlikely to
rules
remove
all the important differences between the separate
markets. Economies of scale in administration
growth
Views of the Scottish life companies are
in
Blitzkrieg
marketing
larger life offices.
make
Scottish
money. This surely is the approach they should
is in general heavily protected.
financial
1980's
companies have been successful by long
sustained
following
The third major element of the Scottish
early
made money from them or look likely to
together
rates
attractive
prices
in
with the prospect
other
Community
of
counties
benefits but it is easy to
for
acquisitions
which
and
faster
pay
are
fancy
require
large
arena point to the growth of Scottish life offices
investments to fit in with existing operations and
in
to
UK
market
least,
share and for
low
emphasise
expense
a
poor
disputed),
record
of
dependence
intermediaries,
their
some
ratios.
mutual
companies
Their
innovation
on
at
critics
(hotly
independent
a lack of capital as a result
structure
and the
prospect
of
of
a
significant reduction in demand as the effects
of
a series of special factors post 1984 are reduced.
achieve
economies
of
scale.
Organic,
consolidated growth may appear less dynamic but it
could
be more profitable in the long
run.
That
said, however, Europe requires an initiative
from
the Scottish companies. There is little reason for
them
to
be adversely affected so
long
as
they
grasp the opportunity presented to them and
the
same skills to it as they have in
apply
developing
their traditional business.
The criticisms are no doubt extreme.
The
success
of
the Scottish offices in securing market
is
a
significant
achievement.
share
This
conclusion
with
Allan
Hodgson
Problems
marketing are being addressed by more formal links
Effects
with banks and building societies and the move
remark
some
of
the
Association
sales
The costs of such
are
shareholders
the
as
large
and
in
a
the
move away from dependence on
intermediaries
Widows,
the
Life
direct
is discernible with
However,
of
the
the
particular
of
strong
distribution
advantages
channel
a
a
Scottish
for example, seeking to generate
absence
the
of
20%
In
from
the
inadequate capital
base
life companies limits
other
other
their
any
diversified
approach to sales and marketing appears sensible.
only
takeover,
of Scotland in 1985
be
and
a deterrent to
the
lack
of
shareholders
capital
could
restriction
on the rapid growth of
the
mutuals
by
acquisition but is this
thing?
How many of the major banks who
such
for
to
cash.
stake
very
in
this
largest
it is not clear that this
is
the
best way to proceed.
The
conclusions of the above paper that
should
centres
be
Scotland
aspire to be one of the principal
of Europe and should export its
venture
merchant
banking skills appear quixotic. Is it really
a
Scottish
a
the
status
illustrated,
that these skills are particularly well
The
They
of
ability
than
as the acquisition of the 34%
Bank
need
companies
of
1992:
of
business in the future from tied agents.
the
of
absence
independent
those
sector as a whole and note that the mutual
acquire
However,
of
'Towards
on the Scottish Financial Sector'.
on
development,
funds would cut into the bonuses
mutual companies policyholders.
gradual
its
such
of Scotland, into acquiring a
force.
however,
companies,
by
flies in the face
and Ewan Brown in
bad
acquired
in Scotland and that they are readily
true
developed
exportable?
It is difficult to see this as being the case.
An
apparent,
is
implicit,
assumption of the
paper
that financial institutions have to be very
31
large
to
succeed.
banks
Has the experience of the larger
been better than that of the smaller
UK
ones?
Long term strategy in Europe requires building
our strengths.
on
Acquisition is not necessarily the
January, though net employment increases were only
recorded
in
indicators,
outlook
Glasgow
and
Aberdeen.
both the short-term
On
all
performance
best route to success.
particularly good.
DISTRIBUTIVE TRADES
A
net
66% of February
SCBS
retai1
were
respondents
reported increased sales over the preceding
According
to
the latest SCBS (which
covers
the
and
of wholesalers in the Aberdeen area
three
months. Of course, this period included Christmas,
period November 1989 - January 1990), a balance of
which
+46%
and although SCBS respondents are asked to exclude
of Scottish wholesale
respondents
reported
increased sales compared with the preceding
months.
A
net 17% of wholesalers
also
three
recorded
full-
increases in employment, with gains in both
reported
made
it
three
month
wholesale
in February with equivalent
in November (see December 1989
is
clear
sales,
seasonal
factors, it is frequently difficult
for
them
do
the
to
so
accurately.
In
spite
of
significant growth in sales, retail employment was
time
the
retail
essentially static, with a small net fall in full-
time and part-time jobs.
Comparing
generally gives a fillip to
that the
sector
results
employment
being effectively offset
by
an
equivalent rise in part-time employment.
projections
Commentary),
performed
better
Perhaps
reflecting
effects
of
growing
continuing
concern
high
about
interest
the
rates
on
during the period than had been expected by member
consumer expenditure, a net 18% of SCBS
retailers
firms. In turn, this unexpectedly good outturn
they
is
were
less
probably at least partly responsible for
Scottish
been
three
wholesalers
February
concerning
SCBS
being
more
optimistic
in
short-term prospects: a net of 36%
respondents
between
expected further
February
and
April,
sales
and
a
of
growth
net
10%
projected increases in total employment.
Table
1
February
gives
SCBS
the
geographical
wholesalers
in
all
experienced
sales
Chamber
growth
of
On
earlier,
respondents
increases
in
though
expected
the
balance
further
sales
short-term.
However,
a
significant net majority (26%) expected employment
to
decline,
entirely concentrated in
November
Table 2
losses
in
Geographical Responses to February SCBS
areas
Retailing
and
G
%
Table 1
had
on
of
balance,
Commerce
between
months
full-time jobs.
breakdown
wholesale responses.
(+25%)
optimistic in February than
E
D
A
All
w
QB
<n
Q7
A
m
A
A»
Geographical Responses to February SCBS
Overall
Wholesaling
Balance of Respondents in
G
E
%
%
D
%
A
%
All
%
Confidence
+25
-42
-57
+10
-18
Actual Sales
+55
+41
+65
+92
+66
Expected Sales
+30
+11
+38
+50
+25
Actual Employment
-15
+24
+14
+20
+3
-40
-64
-13
-41
-26
+1
+3
+7
+34
+7
Expected
Employment
Investment
Overall
Confidence
-33
+31
-3
+23
-3
Actual Sales
+43
+42
+35
+5
+46
Expected Sales
+20
+40
+37
+59
+36
+7
0
0
+46
+17
-40
+35
+18
+41
+10
Actual Employment
Intentions
Key:
G = Glasgow
E = Edinburgh
D = Dundee
A = Aberdeen
Expected
Employment
Intentions
The
geographical pattern of February SCBS
responses
Investment
+21
+60
+20
+15
+21
expected
is
sales
shown in Table 2.
increases were
Net
retail
actual
recorded
in
and
all
areas, most notably in Aberdeen. In spite of this,
Key: G = Glasgow
D = Dundee
E = Edinburgh
net
A = Aberdeen
forecast across the board.
32
short-term
falls
in
employment
were
also
Scotland,
TRANSPORT AND TRANSPORT EQUIPMENT
as
an
international freight and distribution centre
the
marketing
of
Prestwick
and
The major occurrence in this sector is clearly the
the
removal
in this role, are all necessary.
of Prestwick's monopoly of
transatlantic
provision of investment to support
Prestwick
flights, a decision which this Commentary has long
advocated
on
the
gateway
status
Scottish
economy.
Institute
that
the
wider
airport's
costs
to
The study undertaken
by
the
the
The
beyond
any
plans for the Scottish Bus Group.
Among the sampled respondents,
for
be on a phased basis, with Lowland Scottish likely
of
Transport proved this
doubt.
Road
the
which was submitted as evidence to
Department
real
grounds
involved
Scottish
example, it was shown that over 80% of journeys to
to
North
went
programme
through
complete.
America made by Scottish
via
Heathrow,
Prestwick,
trips
compared
and
made
to
businessmen
only
15%
approximately 75%
of
could have used Glasgow
scheduled
the
if
created.
daily
a
Over
of respondents chose not to use Prestwick
also
felt
destinations
concluded
to
of
North
and feeder services.
there
American
It
was
also
that the inadequacy of road/rail
Prestwick
were
to be a lack
from the major
population
links
centres
a problem, but that this was only one
number
of
while
improving
major problems and it was
condition
would
68%
because
of the inadequate frequency of services and
was
for
not
such
links
increasing
in
itself
was
demand
have
been
of
clear
that
necessary
at
Prestwick,
sufficient
to
Overall,
there was clearly substantial discontent over
existing
policy
a
a
overcome the other problems noted above.
and 91% of respondents
the
8,000
a
service had been available.
be
the
were
in
favour of a change in favour of Glasgow.
and
would
bring
substantial
diversion
traffic
effects
Costs
monopoly
of
services
have
that no one company
to purchase
more than two of
the
buyer.
grant
In addition, the
the same concessions in favour of
employee
of
the
national bus company in
England,
against outside bids.
Contrary
win
to expectations, Yarrow have
frigates,
all
Tyneside.
of which went to
Swan
before,
is
there
the
most
is
of the previous
policy
for
There
at
rationalised
doubt
that
little
cost-effective
place
to
a
part
is
the
understandable
decision, which
of the Navy to avoid
modular
of
the
anger
on
can
on economic grounds as a
for
only
be
desire
on
dependence
on
a
single supplier, for both competition and security
reasons.
to
next
£12m per annum and the study estimated that up
to
addition,
16,000 new jobs could now be created in Scotland.
to
the type 23, having been responsible
up
business were estimated as being
up
been
design and having invested £8m in
the
23
on
As has
Clydeside
in
to
Hunter
The company may now be facing
1,000 redundancies later this year.
its
failed
any orders for the latest batch of 3 type
the
being
namely
that these will be allowed to bid at a 5% discount
resulting
now
will
buyouts which were offered at the time of the sale
23.
particularly
the
government
type
effects,
be
nine,
contiguous companies will not be sold to
same
and
Scotland,
been
will
cost-reduction
and previously marginal trips
undertaken.
Scottish
be
specially designed for construction
from
whole
to
hall
of services from Heathrow to
generating
the
policy
the study found that a change in
employment-creating
tourism
Scottish
and
A total of nine new companies will
firstly
discussed
regard to the wider losses for the
sold,
will
year
private
announced,
allowed
disposal
Some safeguards against the creation of
produce
economy,
first company
its
Disposal
is expected to take about one
Yarrow's
With
Office has announced
the
Yarrow's reaction has been to seek
the
batch of orders with renewed vigour and,
has recently announced plans to
basic
type
23 design
into
a
new
in
modify
"supei—
frigate" which it believes will appeal to all NATO
countries.
In
view of the above, particularly
unpopularity
travellers,
of
Prestwick
the
amongst
we firmly believe that
the
so
jobs on
present,
Clydeside
however,
are
business
dependent on Yarrow's winning at least some of the
next batch of orders, expected next year.
must
Finally,
will
new assembly shop which will make the large
future.
heavily
for
Arguments
Prestwick's
the
decision
now concentrate on developing a policy which
ensure
airports) was correct.
or
the
thousand
(which can properly be called an historic one
Scottish
For
manifest
Improvements
surface access from North Ayrshire to the rest
Kvaerner, Govan is to invest £llm
in
tanks
for the company's liquified
of
(LPG)
tankers.
33
petroleum
This is part of an overall
in
a
cargo
gas
£26m
investment programme which will take place between
is
now
disputed by at least some elements on the
and 1992.
The project was grant aided
from
the Scottish Office to the extent of £3m.
the result of mismanagement. This is
1
necessary
discussed
measures
have
recently
in Stevens, J and Dunlop S,
Lowlands
Airports
Retrospect'.
Quarterly
Policy:
Fraser
of
been
'Scottish
Allander
wins
the
blame
mismanagement/in-
efficiency
view
disruptive
resource reallocation
day
then
some
very
decisions
will
have to be taken in Lothian.
Prospect
Economic Commentary,
Lothian
Board and by Labour politicians who largely
government underfunding. If the
The
strongly
Institute,
September
1989,
On
the
Health
pp54-83.
complex
HEALTH
NHS Review front little has
Boards
are believed to be
been
busy
tasks as valuing their capital
for the new capital charging system: the
heard.
on
sceptics
wait to see just what sort of results appear
Government
allocations to Scottish Health
Boards
this activity since, in common with other
for 1990-91 have been announced. The total sum
is
Papers
£2061
million
an
Patients",
8.3%
increase
for gross recurrent
spending,
on 1989-90. This is a
real
terms
related
to the White Paper
from
Working
"Working
detailed practical advice is in
supply in the paper on capital charging.
such
resources
For
short
Scottish
increase of 3.17% according to the Scottish Health
hospitals
Minister.
out", i.e. take Hospital Trust status, although it
The figure includes £89M
commitments
including
training,
and
projects
such
Aids,
the
and
NHS
a
as waiting
for
specific
Review,
further
list
nurse
£36M
initiatives
was
health
the
that
these
in
is
Scotland.
to
His
heard again. In
quiet
quarter for the health sector
(with
the
dispute)
notable
the
political
exception
of
a
at
Lothian
Health
relatively
in
Scotland
the
the loudest noises surround
"crisis"
ambulance
the
Board
budget
with
the
occasional rumble from Greater Glasgow, where
the
management proceeds apace with proposals to put to
tender
all
manner
of
activities,
including
laboratory services and medical records as well as
the usual "domestic" services, and where nurses in
training claim there are not enough jobs for
on
completion
situation
the
of
their
training.
The
provides a microcosm of the
them
Lothian
debate
NHS concerning levels of resources and
in
their
"efficient" use. The latest "forecast" from "wellplaced insiders on Lothian Health Board" (Observer
Scotland
based
25
on,
February 1990) is
a
£27M
deficit,
inter alia, an £8.2M deficit
for
the
current year, a similar operating deficit for next
year,
a decline in the real value of next
allocation
(a
figure that might be
year's
disputed
SHHD on the basis of an 8.2% announced
by
increase),
and the effect of the annual 1% efficiency savings
demanded
Cruikshank,
executive
Peat,
by
the
the
in
district
general
be a candidate, thus raising the possibility
opponents beg to disagree, and the familiar cry of
"underfunding"
new
and
figures
Government's commitment
service
the
that
the hospital would opt out before it was in, so to
Minister claims
demonstrate
that
hospital in Ayrshire, due to open next year, might
speak.
Health
reported
"opt
for
breast cancer screening.
The
do not appear to be queuing up to
Scottish
recently
Office.
appointed
Scotland, backed by a
For
NHS
report
Marwick and McLintock, the current
Don
chief
from
deficit
34
The Labour Market
As past Commentaries have noted, recent experience
male.
of
employment were reduced significantly below
changes
data
in official estimates
serves
to emphasise the
of
need
employment
for
caution
amongst those who seek to interpret recent
market
trends.
Significant
labour
under-reporting
of
employment growth had apparently occurred prior to
In
implied
fact
estimates
of
part-time
by the LFS (wherein such
was
the only employment to be revised downward).
Thus
estimates of part-time female employment at
1989
were
reduced
that
by some
estimates
26,000
of
to
the 1988 Labour Force Survey (LFS). However, it is
implying
employment had increased by some 8,000.
the
those
employment
clear
from the recently published results of
female
March
361,000,
full-time
female
1987 Census of Employment that LFS estimates overestimated
the
extend
of
under-recording
of
employment.
The
the
revisions to the estimates of the numbers
employees
The most recent employment data (available only on
of
in employment in Scotland generated
by
basis
of census induced revisions)
September
1989,
Tables
and
1
employment
and those are also
2.
Overall,
total
are
for
reported
in
employees
in
increased by 7,000 (0.4%) in the
year
the September 1987 census are reported in Tables 1
to
in
employment
and
rose by 4,000 (0.4%), and total female
employment
2. On the original estimates total
employees
September 1989. Male employees
in employment grew by 26,000 roughly 1.4% over the
increased
year to March 1989. The revised estimates show
recent
increase
of
18,000 or 1.0% (on a
base
estimate
which is lower by 0.5% than originally). In
1989
for
example,
employment
of
March
employees
has been revised downward due
by a total of 18,000, which is
census
to
the number
an
in
to
the
fell
by 2,000 (0.2%). Unusually relative
experience,
part-time
female
significantly by 11,000 and (3.0%),
2.4%. Accordingly, full-time equivalent employment
actually
increased
by
more
than
the
levels
time is interpreted as "one-third time", then full
of
time
equivalent employment rose by
about
(0.6%). Although this is a very modest
1988 LFS based revisions
numbers
employed over the year to September 1989. If part-
a decrease in estimated employment
earlier
whereas
full-time female employment grew by some 13,000 or
equivalent
1.1% of the employment stock.
The
to
employment
seemed
imply a rather different picture of labour
to
market
gain
the
pick up in male
employment
is
and
encouragingly
full-time
to
of
increased
of
employment occurred in production and construction
against
levels
fairly
of
unemployment
stable employment.
For
some
37,000 yet the number
of
only 5,000 over the same period.
that
in
It
risen
appeared
fact
at
increasing
by
a
comparable
was
amount,
recorded employment failed to pick
the time. The census
based
account.
employees
reduced
in
to
of
with
Although the
estimated
level
of
employment at
September
1987
was
increase
to
1880.7,
the
implied
Over
the
September 1988 was 42.2 thousand.
composition of the downward revision
to
numbers of employees in employment, was for
insurance
and
distribution,
major
(4,000)
the
by:
and
and catering
biggest
banking,
wholesale
(4,000).
loss of 7,000 was
The
incurred
by
Table 3 provides some idea of the regional changes
in employment which occurred in employment between
the
last
the
March
are
the
of
all, being the only region to register a
in
employees in employment (of 23,000
three
fall
or
1.2%),
the UK as a whole experienced a 2%
growth
in employment. Since then Scotland has experienced
employment
growth
none
two censuses. Clearly, over
year period to September 1987 Scotland fared worst
in
employment
finance
hotels
1989
registered
public administration and defence.
Yorkshire
employees in
September
were
employment
1989, as follows. Of the total reduction of 18,000
estimated
to
gains
whilst
The
year
employment
this
estimates
employment are apparently equally compatible
this
in
as unemployment was falling, employment
although
up
fell
employees
employment was originally estimated to have
by
industries, and 2000 in services.
example,
over the year to September 1988 unemployment
by
of
juxtaposed
the
past
experience.
Commentaries had commented on the "puzzle"
thousand
female
relative
flows than was previously available. Thus a number
decreasing
Five
13,000
employment
35
has
growth
and
although,
Humberside
and
been comparatively
together
the
North,
modest
in
with
this
scale
Table 1
Employees in employment in Scotland: industry aggregates (000's)
(Figures in parentheses reflect revisions due to 1988 LFS and those in square brackets
reflect 1987 census)
Female
Male
All
Part-time
Production
Total
SIC 1980
& construe. Production
Manufacturing
Services
industries
industries
industries
industries
1-5
1-4
2-4
6-9
Scotland
1979 June
1,205
897
332
2,102
831
676
604
1,224
1983 June
1,060
839
337
1,899
646
512
444
1,216
1986 Sept
1,020
866
367
1,886
595
460
409
1,261
1,006
868
375
1,874
586
451
404
1,259
997
865
375
1,862
578
442
396
1,254
1,006
880
379
1,886
579
441
395
1,277
Dec
1987 Mar
June
( 1 , 0 1 0 ) (882)
Sept
1,001
878
( 1 , 0 1 1 ) (884)
Dec
996
881
( 1 , 0 1 2 ) (891)
1988 Mar
June
Sept
(1,892)
383
1,879
577
437
392
1,273
(381)
(1,895)
(584)
(442)
(397)
(1,283)
389
1,877
572
432
388
1,278
(385)
(1,903)
(582)
(440)
(395)
(1,294)
387
1,868
570
429
386
1,271
( 1 , 0 1 0 ) (893)
(381)
(1,903)
(584)
(439)
(396)
(1,292)
[1,013] [880]
[362]
[1,893]
[591]
[464]
[408]
[1,274]
389
1,888
568
427
385
1,292
( 1 , 0 2 0 ) (908)
(383)
(1,928)
(584)
(439)
(396)
(1,316)
[1,021] [890]
[361]
[1911]
[592]
[466]
[408]
[1,290]
389
1,884
569
427
387
1,287
( 1 , 0 2 2 ) (910)
(382)
(1,932)
(588)
(443)
(400)
(1,315)
989
996
992
879
892
892
[1,027] [896]
[362]
[1,922]
[598]
[473]
[415]
[1,295]
( 1 , 0 2 0 ) (923)
(396)
(1,942)
(589)
(443)
(402)
(1,327)
[1,015] [900]
[370]
[1,915]
[600]
[476]
[418]
[1,287]
( 1 , 0 1 5 ) (914)
(387)
(1,929)
(587)
(440)
(401)
(1,314)
[1,015] [895]
[361]
[1,910]
[597]
[473]
[415]
[1,284]
Jun
[1,017] [906]
[367]
[1,923]
[595]
[470]
[412]
[1,299]
Sept
[1,031] [898]
[351]
[1,929]
[603]
[477]
[419]
[1,297]
Dec
1989 Mar
Source:
Dt2partmen1; o f Em jloyment G a z e t t e , November 1989 and e a r l i e r i s s u e s .
36
Table 2 Employment: Scotland Employees in employment ('000s)*
SIC
1980
Agric./
Energy
Metal
forestry/
and water
Manuf. &
Met. goods,
Eng.
Other
Constr-
f i s hing
supply
chemica"Is
vehicles
Manuf.
uction
0
1
2
3
4
5
&
1979
48
72
82
258
265
155
1983
37
68
55
195
194
134
1984 Mar
36
66
52
189
191
136
June
35
65
53
189
192
136
Sept
37
65
53
187
193
139
Dec
33
65
53
188
192
138
1985 Mar
32
63
53
187
190
137
June
34
60
52
188
191
136
Sept
36
59
51
189
189
136
Dec
31
58
50
186
187
135
1986 Mar
31
56
49
184
183
133
June
31
53
48
182
181
134
Sept
30
51
48
180
181
135
Dec
29
47
47
178
179
135
1987 Mar
30
46
47
176
173
136
June
30
45
46
177
172
135
Sept
28 ( 2 8 )
45 ( 4 5 )
46 ( 4 6 )
175 (177)
171 (1 73)
140 (142)
Dec
27 (27)
44 ( 4 4 )
46 ( 4 7 )
173 (176)
169 (172)
140 (142)
27 (27) [ 2 8 ] 42 ( 4 3 ) [ 5 7 ]
46 ( 4 7 ) [ 4 8 ] 172 (177) [161]
168 (172) [199] 141 (144) [126]
June
28 (28) [ 2 9 ] 42 ( 4 3 ) [ 5 8 ]
45 ( 4 6 ) [ 4 7 ] 173 (178) [161]
167 ( 1 7 2 ) [200] 141 (145) [126]
Sept
28 ( 2 8 ) [ 3 0 ] 41 ( 4 2 ) [ 5 8 ]
45 ( 4 7 ) [ 4 7 ] 175 (181) [164]
166 (1 72) [204] 142 (145) [125]
1988 Mar
Dec
(27)
[ 2 8 ] (41)
[58]
(48)
[ 4 8 ] (183)
[165]
(171)
[205] (146)
[124]
1989 Mar
(27)
[ 2 8 ] (40)
[57]
(48)
[ 4 8 ] (185)
[166]
(168)
[202] (147)
[124]
June
[29]
[58]
[47]
[164]
[201]
[125]
Sept
[30]
[58]
[48]
[165]
[206]
[126]
(cont.)
37
Table 2 Employment: Scotland Employees I n employment ( ' 0 0 0 s ) *
(cont)
W/sale d i s t .
T/sport &
Banking,
Public
Retail
communi-
i nsurance
admin
6 1 - 63
distrib
cation
& finance
defence
oth.
66- 67
64/65
91-92
93-99
403
hotels
SIC
1980
&
c a t e r i ing
7
8
Educ.
&
health &
1979
197
194
135
123
170
1983
188
183
119
140
171
416
1984 Mar
180
183
118
138
170
421
June
193
186
115
141
170
425
Sept
193
186
115
146
170
419
Dec
187
196
114
146
169
422
1985 Mar
188
184
115
147
169
427
ser
June
195
185
115
146
170
432
Sept
198
188
115
151
172
428
Dec
191
193
113
150
171
433
1986 Mar
190
187
m
151
172
428
June
199
186
110
155
175
435
Sept
199
187
111
158
176
431
Dec
190
191
108
159
176
436
1987 Mar
189
183
106
161
176
439
June
198
185
108
165
177
444
Sept
202 (203)
182 (183)
108 (109)
164 (166)
179 (180)
439 (442)
Dec
194 (197)
191 (193)
106 (108)
166 (169)
179 (181)
442 (446)
1988 Mar
June
Sept
199 (202) [ 1 8 7 ] 184 (186) [ 1 8 1 ] 105 (107) [114] 165 (169) [ 1 6 1 ] 180 (183) [ 1 8 6 ] 439 ( 4 4 5 ) [ 4 4 5 ]
208 (212) [ 1 9 3 ] 185 (187) [ 1 8 0 ] 105 (108) [ 1 1 5 ] 169 (173) [ 1 6 5 ] 181 (185) [ 1 8 8 ] 444 ( 4 5 2 ) [ 4 4 9 ]
203 (207) [ 1 9 0 ] 185 (188) [182] 103 (106) [117] 174 (179) [ 1 6 8 ] 178 (184) [ 1 8 7 ] 443 ( 4 5 1 ) [ 4 5 1 ]
Dec
(205)
[ 1 8 6 ] (188)
[ 1 8 6 ] (106)
[114] (179)
[ 1 6 7 ] (175)
[178](469)
[455]
1989 Mar
(201)
[ 1 8 6 ] (188)
[ 1 8 2 ] (104)
[ 1 1 5 ] (183)
[ 1 7 0 ] (168)
[178](469)
[454]
June
[194]
[184]
[115]
[172]
[179]
[455]
Sept
[194]
[184]
[116]
[172]
[180]
[451]
Source: Department o f Employment Gazette
38
Table
3
Employees
in
employment
in
the
UK,
Table 4
September 1984 and September 1987 by region
Unfilled
Vacancies
Scotland
at
Vacancies
Jobcentres
at
Jobcentres
(Thousands)
Thousands
Vacancies
at Career
Seasonally adjusted
South East
Census
Census
1984
1987
Change
%
Number
Change Average
7,219
7,400
+182
+2.5
717
739
+22
+3.0
East Anglia
Offices
Number
since
chge over
Unad-
prev.
3 months
justed Unad-
month
end i ng
Total
justed
0.5
0.5
0.5
South West
1,553
1,628
+76
+4.9
West Midlands
1,981
1,989
+0.4
1988 Jan
19.6
-1.0
-0.3
16.8
East Midlands
1,457
1,508
+8
+51
+3.5
Feb
Mar
19.5
-0.1
-0.5
17.0
19.8
0.3
-0.3
18.5
1,774
1,783
+0.5
North West
2,296
2,345
0.9
1,074
20.1
-0.5
19.6
-0.4
0.3
0.2
0.0
20.6
1,060
Apr
May
Jun
20.6
North
19.8
0.2
0.2
0.0
-0.3
21.2
0.0
0.1
20.7
Yorkshire &
Humberside
1,904
1,881
+9
+49
+14
+38
-23
20,846
21,271
+425
+2.0
500
507
+7
+1.4
21,346
21,778
+432
+2.0
924
886
Wales
Scotland
Great Britain
N. Ireland
United Kingdom
+2.1
+1.3
+4.3
21.3
21.0
0.4
0.7
0.7
-1.2
Jul
Aug
Sep
20.0
21.8
0.6
0.6
0.6
Oct
20.6
0.6
0.3
22.0
0.4
Nov
20.0
-0.6
0.0
20.5
0.5
Dec
20.5
0.5
0.2
18.8
0.4
1989 Jan
20.0
-0.3
-0.1
17.0
0.5
Feb
19.9
-0.1
-0.0
17.2
0.5
Mar
19.8
0.1
-0.2
18.5
0.5
Source: Employment Gazette, October 1989
(e.g. 0.7% over the year to March 1989 compared to
20.0
a UK average of 1.4%)
Vacancies: Stocks and Flows
Apr
20.3
0.5
0.1
20.2
0.6
vacancies
May
20.5
0.2
0.2
21.5
0.7
at job centres in Scotland fluctuated between 19.8
Jun
21.8
0.0
0.7
23.3
1.0
Over
the year to January 1990 unfilled
(17.0)
and 24.7 (25.3) thousands on a
adjusted
(unadjusted) basis (Table
seasonally
4 ) . However,
Jul
21.8
0.0
0.5
23.1
0.9
1988.
Aug
22.1
0.3
0.5
22.7
0.9
Indeed a trend increase has been discernible since
Sep
22.6
0.5
0.3
24.5
1.0
vacancies
the
have been higher as compared
to
"trough" (at around 10.8 thousand)
However,
the stability in the stock
of
of
1981.
unfilled
Oct
23.4
0.8
0.5
25.2
0.8
terms
Nov
24.7
1.3
0.9
25.3
0.9
5). These
Dec
23.4
-1.3
0.3
21.9
1.1
1990 Jan
22.8
-0.6
-0.2
19.8
1.1
vacancies conceals considerable activity in
of
gross
were
of
inflows and outflows (Table
a
similar order
of
magnitude
to
the
outstanding stock of vacancies in each month.
For
example, in January 1990 inflows of 19.8
(over
nearly
6,000
less than the
matched
by
outflows
previous
of
thousand
year)
20.1
were
thousand.
*
Accordingly, during 1988 there was a total of over
Vacancies
at jobcentres are only
about
third of all vacancies in the economy
240,000 vacancies at job centres, well over 80% of
which
resulted
in placings.
The
short
average
duration of vacancies is a sign that employers
on
Source: Employment Department Press Notice
39
one
Table 5: Vacancy flows at Jobcentres, standardised, seasonally adjusted
Scotland
Thousands of which:
In-•flow
Out-flow
Average
Average
Average
change
change
change
3 months
3 months
Level
ended
Level
20.9
0.2
0.6
0.6
20.1
Nov 21.7
Dec 22.1
22.2
Date
1987 Oct
Placings
21.1
ended
0.1
0.6
1.0
3 months
Level
ended
17.2
0.0
0.4
0.8
18.0
18.8
20.5
-0.1
21.6
0.5
18.1
0.3
Feb 20.2
Mar 20.6
-0.5
20.6
-0.2
17.3
-0.2
-0.5
20.4
-0.6
17.1
-0.6
Apr 20.7
May 20.8
0.1
0.2
0.1
20.4
-0.4
17.3
-0.3
20.5
17.4
21.5
0.0
0.4
18.2
0.0
0.4
-0.2
1988 Jan
June 20.9
Jul 20.1
Aug 20.9
Sep 21.2
-0.2
19.8
-0.2
16.6
0.0
0.1
20.7
0.1
17.5
0.0
20.7
-0.3
17.4
-0.3
Oct 20.9
Nov 21.0
Dec 21.5
0.2
0.1
0.1
20.8
0.3
0.4
0.0
17.5
0.2
0.4
0.1
20.4
-0.2
20.7
Feb 21.9
Mar 21.1
0.3
22.3
-0.1
21.3
1989 Jan
21.6
20.9
18.4
17.8
0.0
0.2
0.1
19.1
17.5
18.0
0.0
0.2
0.1
Apr 21.3
May 21.4
Jun 21.9
0.3
20.9
0.1
17.6
0.0
-0.2
20.9
-0.5
17.7
-0.5
0.3
20.1
-0.4
17.1
-0.3
Jul 22.1
Aug 23.1
Sep 22.6
0.3
0.6
0.2
22.0
0.4
0.6
0.7
18.5
22.8
0.3
0.5
0.5
22.2
0.7
0.5
23.4
24.6
22.1
-0.2
19.8
-1.4
Oct
Nov
Dec
24.1
1990 Jan
19.2
18.6
19.8
22.6
0.5
0.2
0.1
19.1
0.4
0.2
0.2
20.7
-0.9
17.5
-0.8
23.4
Source: Department of Employment
40
19.7
Table 6
Scotland - Unemployment - seasonally adjusted (excluding
leavers (000s) (Figures in parentheses reflect estimates on
September 1988 basis - see text for details)
Chge. s i n c e
previous
Date
Male
1984
1985
month
Av.chge
Unemp r a t e
6 months
ending
percentage o f
working pop.
Female
Total
235.2
106.4
341.6
14.0
243.6
109.3
353.0
14.2
1986
248.1
111.8
359.8
1986 Dec
242.6
104.8
347.4
1.2
1.1
1987 Dec
218.2
90.5
308.7
-2.6
-4.2
12.4
(214.5)
(87.8)
(302.3)
(2.8)
(-4.1)
(12.2)
1988 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
14.5
14.0
216.0
90.2
306.2
-2.5
-4.1
12.3
(212.4)
(87.3)
(299.7)
(-2.6)
(-3.9)
(12.1)
213.5
89.9
303.4
-2.8
-2.8
12.2
(209.7)
(86.9)
(296.6)
(-3.1)
(-3.7)
(11.9)
211.6
88.5
300.1
-3.3
-3.4
12.1
(207.7)
(85.6)
(293.3)
(-3.3)
(-3.4)
(11.8)
208.8
86.5
294.9
-5.2
-3.4
11.9
(204.6)
(83.8)
(288.4)
(-4.9)
(-3.5)
(11.6)
206.0
85.1
291.1
-3.8
-3.4
11.7
(202.5)
(82.3)
(284.8)
(-3.6)
(-3.4)
(11.5)
202.5
83.4
285.9
-5.2
-3.8
11.5
(199.0)
(80.7)
(279.7)
(-5.1)
(-3.8)
(11.3)
199.3
82.7
282.0
-3.9
-4.0
11.4
(196.0)
(79.9)
(275.9)
(-3.8)
(-4.0)
(11.1)
197.5
82.1
279.6
-2.4
-4.0
11.3
(194.3)
(79.1)
(273.4)
(-2.5)
(-3.9)
(11.0)
201.0
82.1
283.1
(194.2)
(78.1)
(272.3)
3.5
(-1.1)
-2.8
11.4
(-3.5)
(11.0)
Oct
(193.4)
(76.7)
(270.1)
(-2.2)
(-3.1)
(10.9)
Nov
(191.0)
(75.5)
(266.5)
(-3.6)
(-3.1)
(10.7)
Dec
(186.7)
(73.5)
(260.2)
(-6.3)
(-3.3)
(10.5)
1989 Jan
(184.0)
(72.6)
(256.6)
(-3.6)
(-3.2)
(10.3)
Feb
(181.7)
(71.7)
(253.4)
(-3.2)
(-3.3)
(10.1)
Mar
(180.2)
(70.3)
(250.5)
(-2.9)
(-3.6)
(10.0)
Apr
(175.1)
(68.2)
(243.3)
(-7.2)
(-4.5)
(9.7)
May
(172.8)
(66.7)
(239.5)
(-3.8)
(-4.5)
(9.7)
Jun
(170.0)
(65.0)
(235.0)
(-4.5)
(-4.2)
(9.4)
Jul
(168.9)
(63.9)
(232.8)
(-2.2)
(-4.0)
(9.4)
Aug
(167.7)
(63.3)
(231.0)
(-1.8)
(-3.7)
(9.3)
Sep
(163.0)
(61.8)
(224.8)
(-6.2)
(-4.3)
(9.1)
Oct
(159.2)
(60.4)
(219.6)
(-5.2)
(-4.0)
(8.8)
Nov
(155.8)
(59.0)
(214.8)
(-4.8)
(-4.1)
(8.6)
Dec(r; ( 1 5 3 . 0 )
(57.5)
(210.5)
(-4.3)
(-4.1)
(8.5)
1990 J a n ( p ; ( 1 5 0 . 3 )
(56.4)
(206.7)
(-3.8)
(-4.4)
(8.3)
Source: Department of Employment Press Notices
( p ) p r o v i s i o n a l and s u b j e c t t o r e v i s i o n ( r )
41
school
Revised
most
Table 7:
Unemployment
flows
-
standardised,
recent data, of course, reflect the
have
unadjusted: Scotland (000s)
been
reflect
In-flow
Month ending
current
rules governing eligibility to claim benefit which
in place since September
1988.
These
the extension of a guaranteed offer of
a
YTS place to all those under 18 who have not found
Out-flow
a job, under the Employment Training Scheme. Under
18s
are
consequently not now entitled
to
claim
1987 Oct
46.7
54.5
benefit and so are excluded from the
Nov
Dec
44.0
47.5
count.
38.2
35.3
unemployment
1988 Jan
43.0
34.6
Feb
Mar
Apr
May
Jun
Jul
Aug
39.8
48.2
January
35.6
46.1
percentage points) in total unemployment (of which
38.3
44.6
2.7 thousand was attributable to males and 1.1
32.5
45.8
females).
Table
unemployment
6 presents a short time
series
in the old as well as the new
of
basis
to facilitate comparison.
saw
a
fall of some
Over
3.8
the year to
thousand
January
(0.2
1990
to
total
35.5
44.2
unemployment fell by about 50 thousand, from 256.6
43.0
41.5
thousand
34.2
40.1
represents
Sep*
43.4
43.3
unemployment
Oct
Nov
Dec
37.9
55.2
constitutes
36.6
38.4
labour
33.5
34.3
reduction
1989 Jan
32.2
26.9
Feb
Mar
33.1
40.7
Table 7 presents recent flows into and out of
31.7
39.0
unemployment stock. In January 1990
Apr
May
Jun
30.5
38.9
the same month of 1989, although outflows were, at
27.3
38.6
22.9
27.9
35.5
Although gross outflows in January were rather low
Jul
Aug
Sep
37.1
33.5
unemployment
30.9
33.5
less than 7 months.
33.0
41.6
Oct
Nov
Dec
31.9
38.2
31.5
34.2
The engineering workers stoppage in support of the
27.8
26.8
35 hour week continues to be a significant dispute
1990 Jan
29.7
22.9
or
2
a
full
percentage
reduction
in
points.
the
of 19.5 per cent which,
rather
market.
good news
for
Furthermore,
This
level
of
of
course,
the
Scottish
34,000
of
occurred among males and around
the
16,000
among females.
inflows
at 29.7 thousand, about 2.5 thousand less than
by
thousand, 4,000 less than in
January
the
were
in
1989.
recent standards, if they were maintained
the
stocks of 220,000 would turnover
in
SCOTTISH INDUSTRIAL RELATIONS
in
Scottish
involving
targeted
*
The
September
figures
are
biased
by
the
the
postal strike.
average
because
market
find
do
local
not find it difficult to
of a continuing slackness in
fill
the
posts
labour
(although, of course, employers may
it difficult to recruit specific
still
skills
industrial relations,
other
companies, as
although
those
now
originally
by the CSEU have settled the dispute
by
agreements. Whilst the outcome may well
be
introduction
week,
a
consequence of the dispute will be a weakening
of
the
or
national
enterprise
of
the
system of
bargaining
37
hour
bargaining;
will become
company
the
dominant
pattern within the industry.
in
particular locations).
The
second long running dispute of 1989
journalists
at the Aberdeen based d and
invloved
Journal.
Attempts to reach a compromise have lessened
Unemployment: Stocks and Flows
both
the significance and support for the dispute.
Recent
data
unemployment
on
the
seasonally
adjusted
stock are presented in Table 6.
The
The
42
first
report by the Scottish Low
Pay
Unit,
based
on
a
provides
survey
some
of
Scottish
Job
evidence as to trends in
Centres,
The National Economic Development Office's study "
pay
Managing
and
for Change " provides an insight
as
to
employment in Scotland. More than 40% of the
jobs
some of the more successful managing strategies of
listed had pay rates of under £3.78 and more
than
managing
one
third
were either part
time
or
Whilst the survey was incomplete, it
raises
some
employment
concerns
and
as
to
the
wages, especially
temporary.
nevertheless
patterns
given
of
current
innovation,
development
feature
Employee Share Ownership
more
prominently
in
Programmes,
Scottish
may
employee
relations programmes given the indication that buy
out bids by the employees are to be given a
preference
Bus
that
in the privatisation of
the
Group. Such schemes are an attempt to
the
employees
retain
control
price
Scottish
of
ensure
the
highlighted
of
employees
training
Digital
as
an
style
encourage self control,
the
example
of
management
participation
management seem curiously at odds
of
management in a number
of
by
and
progressive management. Such styles of
open
ESOPs,
The report
consensus,
which
Government proposals to abolish Wages Councils.
staff.
Equipment policies which encourages management
with
the
and
the
health
boards in Scotland where secrecy, bureaucracy
the replacement of staff who oppose change
and
appear
to be the norm. If the path towards efficiency
is
one which encourages staff and involves them it is
even
more surprising that such policies
are
being stressed by the larger Health Boards.
organisation and yet allow individual employees to
sell their shares should they so wish.
43
not
Regional
INTRODUCTION
Review
that interpretation of these short term shifts, is
required.
While
In the last section, The Labour Market, changes in
underlying
or
Scottish
useful
employment
However,
patterns
were
analysed.
it is recognised that movements
in
the
they
may
be
indicative
developing trends, they
for the purpose of drawing
of
are
more
inter-regional
comparisons.
labour market not only differ between Scotland and
the
UK as a whole, but also within Scotland.
The
purpose of this Regional Review is to examine sub-
In
the
twelve
months
to
January
1990,
total
unemployment in Scotland fell by 49,867, a drop of
Scottish changes in the unemployment situation and
18.5%, to stand at 219,176. This has resulted in a
to
further drop in the unemployment rate which, using
highlight the inter-regional variations
which
have occurred intra-regional disparities are
also
considered.
the
wide definition of the workforce,
8.8%.
10%
of the narrowly defined
stands
at
workforce
is
unemployed which is an improvement on last
In
the last section, the data used was
adjusted
for seasonal factors. Data
necessitates
this
that unadjusted figures be
section and this should be
considering
tables
unemployment
quarter
typically
availability
with
and
which
that
used
recognised
compare
which
when
of
months
ago
increase
with
the
in
total
situation
last
quarter and last month. In the three months
October
since
1989, unemployment has risen by 5,051
or
last
work-force based unemployment rate. There was a 3%
prevailed
since
there is an
compared
2.4% which is equivalent to a 0.2% increase in the
last month. At last however,
twelve
Security
However,
current
it
possible to compare current figures directly
those
in
10.8%.
unemployment
year's
the
is
with
Social
reforms introduced in September 1988
no
increase
in
the monthly unemployment
totals,
rise of some 6,315. Whilst these increases may
due
to
since
seasonal factors, it
throughout
Scotland
seems
likely
increases
that
have
witnessed, the underlying trend is to some
longer cloud the annual shifts.
a
be
been
degree
one of increasing unemployment.
In
the
last
Commentary
workforce-based
sub-
Scottish unemployment rates were utilised for
the
In
first
time.
for
numbers
local
authority regions were calculated
Previously, unemployment
rates
using
narrow definition of the workforce which
only
employees in employment and the
unemployed.
The wider rate also includes in its definition
the
workforce, the self-employed, HM
those
on
work-related
programmes.
As
Commentary
in
Forces
government
December's
a
included
and
training
issue
of
we will on the whole continue
both types of unemployment rates but in
of
to
the
last
regions.
of
work
in
declines
all
As was the case last
local
decline
in
unemployment
in
totals
Shetland
proportional
with
a
reduction in annual unemployment totals.
continued
to
be
the mainland
the
authority
quarter,
Isles witnessed the most substantial
region
36.7%
Grampian
with
the
biggest reduction with 4,510 fewer people employed
the
in
use
previous.
assessing
year, there were
out
January this year compared with twelve
Orkney
experienced
and
and
the
Western
months
Isles
also
noticeably above average declines
25%.
The
same
four
regions
of
intra-regional variations in unemployment only the
27.7%
which
wide-based rates have been used. Separate male and
experienced below average proportional declines in
female unemployment rates have been reintroduced.
annual unemployment totals last quarter, again saw
Total unemployment
Just
reductions less than the 18.5% norm, for Scotland.
under half of the decline in Scottish
is attributable to the 24,228 fall in
Table 1 shows for each local authority region
Scotland
as
unemployment
January
taken
and
a
whole,
rate,
the
the
narrow
numbers
unemployed
1989 and 1990, and the change
place over these twelve
monthly
changes
are
months.
also
and
shown
which
and
wide
in
has
but
this
January
is
only equivalent
1989 total. The Borders
to
total
Strathclyde
16.5%
again
of
the
witnessed
the least decline with only 13.1% fewer unemployed
at
the
start of this year
Central and Tayside with respective falls of 16.9%
means
and 17.7%.
44
were
also
last.
but
utilisation of unadjusted unemployment data
declines
with
Below
the
average
compared
Quarterly
recorded
in
Table 1: Unemployment by region
Total
%
rate
Oan 90
Narrow Wi de
Borders
6.0
Central
10.4
5.0
9.1
Total
Jan 90
% Change
Total
Annual
in Annual
Jan 89
Change
Totals
Total
Total
% Change i
Quarterly
Quarterly
Oct 89
Change
345
122
16.5
13.4
2432
2798
-366
-13.1
2087
10956
13192
-2236
-16.9
10834
Totals
1.1
Dumfries &
8892
11408
-2516
-22.1
7636
1256
16.4
Lothian
7.0
9.3
4.8 4.2
10.6 8.9
7.4 6.7
27037
34068
-7031
-20.6
26864
173
Strathclyde
12.4 11.1
122328
146556
-24228
-16.5
120697
1631
7.9
5.3
3.4
15317
18605
-3288
-17.7
14959
519
416
718
657
-199
-27.7
-241
-36.7
493
410
Western Isles
14.6 11.7
1635
2179
-544
-25.0
1459
358
26
6
176
0.6
1.4
2.4
5.3
1.5
12.1
Scotland
10.0
8.8
219176
269043
-49867
-18.5
214125
5051
2.4
Galloway
Fife
Grampian
Highland
Tayside
Orkney Islands
Shetland Islands
Source:
8.6
4933
6324
-1391
-22.0
4352
10.4
13415
16732
-3317
-19.8
13244
11296
15806
-4510
-28.5
11090
581
171
206
9.0
7.4
4.1
Department of Employment
1.3
1.9
Table 2: Male unemployment by region
Unemployment
Rate
January 90
Narrow W ide
Borders
Central
Dumfries &
Galloway
Fife
Grampian
Highland
Lothian
Strathclyde
Tayside
Orkney Islands
Shetland Islands
Western Isles
Scotland
Source:
7.5
5.8
13.3
11.3
10.1
13.3
11.3
5.7
4.7
12.7
10.1
16.5
11.5
10.0
7.6
% Change
Total
Jan 89
Total
Annual
Change
1674
7765
1913
9148
-239
-1383
3190
9465
7683
5957
19934
91656
10681
4036
11613
10638
7738
24520
108541
12961
352
269
479
412
Total
Jan 89
4.6
19.7
14.4
1254
1690
-846
-2148
-2955
-1781
-4586
-16885
-2280
-127
-143
-436
13.0
11.1 159880
193689
-33809
9.3
8.8
14.3
9.6
6.0
3.5
Department of Employment
% Change
in Annual Total
Oct 90
Totals
Total
Quarterly
Change
in
Quarter
Totals
1444
7494
230
271
15.9
2840
-21.0
-18.5
9177
7440
-27.8
5347
-23.0
-18.7 19591
-15.6 89914
-17.6 10393
-26.5
319
-34.7
256
1124
-25.8
350
288
243
610
343
12.3
-17.4 155339
-12.5
-15.1
1742
3.6
3.1
3.3
11.4
1.8
1.9
2.8
288
33
13
130
11.6
4541
2.9
10.3
5.1
The
changes in sub-Scottish
unemployment
totals
Less
variation
in
the magnitude
of
change
is
reveal considerable disparities in the fortunes of
evident
the
the
total. The most substantial increases were seen in
The
the
local
labour
markets.
Analysis
of
unemployment rates confirms this observation.
disparity
with
is
the
greatest between the
Western
Isles
island
having
areas
the
highest
unemployment rate and Shetland the lowest. On
for the monthly changes
Borders
(6.6%).
(6.9%)
and
in
unemployment
Dumfries
and
The smallest increases were
Galloway
recorded
in
the Western Isles (1.2%) and Tayside (1.3%).
With
the
the
Scottish average being an increase of
3%
in
is
the
monthly unemployment totals, this may
be
an
14.6% with Strathclyde exhibiting the next highest
early indication that unemployment in Scotland
is
rate at 12.4%. Rates in excess of the 10% Scottish
again on an increasing trend.
narrow
measure, the rate in the Western Isles
average
were
recorded
for
(10.6%),
Highland
Central (10.4%) and Fife (10.4%). At the other end
of
the
scale,
workforce
in
4.1%
of
the
In
Data relating to male unemployment is presented in
Table 2. Male unemployment totals in Scotland fell
the
by 17.4% in the last twelve months, a proportional
Borders
are
out
of
Male unemployment
defined
Grampian, the rate is also low at 4.8% and despite
annual
Shetland
narrowly
work.
witnessing the most modest
totals,
comparatively
the unemployment
fall
rate
still
fall
low at 6.0%. Analysis of the
wide-
unemployment figures.
based unemployment rates reveal a similar
with
the
Western Isles (11.7%)
(11.1%),
still
Scottish
8.8%
in
is
having
and
rates in
average. Shetland
less
than
the
18.5%
seen
in
a
decline
total
picture
Strathclyde
excess
of
the
again
has
the
All
areas
experienced
unemployment
greater
with the % change in
in
male
annual
totals
in the Shetland Isles and Grampian
which
lowest rate at 3.4% with Grampian the next closest
most likely reflects the healthy state of the
at
4.2%. The primary difference between
rates
is
the numbers in each area
self-employed,
government
those
related
difference
training
two
industry in these areas. Orkney and Shetland fared
are
the
well
those
on
who
in HM Forces and
programmes.
between the two rates is
in
Highland
and Dumfries and Galloway (1.6%). This
probably
a
reflection of
agricultural
in
The
greatest
the Western Isles (2.9%), Orkney (2.1%),
(1.7%)
these
the
areas and the higher
employment
concentration
and fishing activity
is
of
with drops of 26.5% and 25.8%.
excess
of
20%
were also seen
self-
associated with these industries.
unemployment
However,
between January 1989
analysis
of the quarterly
and
1990.
monthly
changes suggest that this trend is being reversed.
reductions
were also seen in Central (15.1%)
The
pattern
dissimilar
In
the
three
in
months
to
all regions
January
and
unemployment
Islands
again
there were variations in the
these
changes. Highland and the Borders
although
magnitude
saw
and
of male unemployment
of
rates
is
not
to that for total unemployment but
higher.
The narrow
male
is
unemployment
3% above the total unemployment
The percentage of the workforce
unable
to
find work is greatest in the Western Isles with
rate
of
19.7% and
again
Strathclyde
has
a
the
highest mainland rate at 16.5%. The rate is lowest
in Shetland and Grampian with respective rates
4.6%
increased
in
Strathclyde ( 15.6%).
generally
decline
and
in
and
Dumfries and Galloway. The change was smallest
rate.
in
Declines
Highland
the Borders with a drop of 12.5% but below average
rate is 13%, some
In each local authority area, there was a
in
of
characteristic
levels
oil
the
and
5.7%. A similar
picture
emerges
of
from
examining the wide based unemployment rate but the
differential
between
the
Western
Isles
and
Strathclyde is considerably narrowed to only 0.1%.
the
greatest increases in unemployment with 16.5% and
16.4%
proportional
January
1990.
experienced
increases in the
Excess
increases
quarter
were
in Dumfries and Galloway (13.4%)
the Western Isles (12.19%). The smallest
was
recorded in Lothian with 173 more
unemployed
Central was 1.1% and below average increases
for
Fife (1.3%), Strathclyde
and
increase
in January compared with October. The increase
noted
to
also
(1.4%),
Shetland Isles (1.5%) and Grampian (1.9%).
in
were
the
As
with
total unemployment, all regions
saw
increase in male unemployment between October
January.
The biggest increase in totals
an
and
occurred
in the Borders with an increase of 15.9%. Dumfries
and
Galloway
Orkney
(12.3%), Highland (11.4%)
Isles (10.3%) also saw notable
Lothian
increases
and
Strathclyde witnessed
of 1.8% and 1.9% respectively.
47
the
(in proportional terms) with
and
the
increases.
smallest
increases
Table 3:
Female unemployment by region
Unemployment
% Change
Rate
Total
% Change
Total
in
January 1990
Total
Total
Annual
in Annual
Narrow
Wide
Jan 90
Jan 89
Change
Totals
4.1
6.7
3.7
6.2
758
885
-127
-14.4
643
115
17.9
3191
4044
-853
-21.1
3340
-149
-4.5
6.8
6.9
3.6
7.9
4.2
7.2
6.0
5.2
1743
2288
-545
-23.8
1512
231
15.3
3950
5119
-1169
-22.8
4067
-117
-2.9
3613
5168
-1555
-30.1
3650
2935
3670
-735
-20.0
2289
-37
646
28.2
Borders
Central
Total
Oct 89
Quarterly
Change
Quarterly
Totals
Dumfries &
Shetland Islands
3.3
Western Isles
7.9
6.2
6.4
3.4
7.2
4.6
6.7
5.6
4.4
3.1
7.3
Scotland
6.1
5.7
Galloway
Fife
Grampian
Highland
Lothian
Strathclyde
Tayside
Orkney Islands
Source:
-1.0
7103
9548
-2445
-25.6
7273
-170
-2.3
30672
38015
-7343
-19.3
30783
-111
-0.4
4636
5644
-1008
-17.9
4566
167
147
381
239
245
489
-72
-98
-30.1
-108
-22.1
174
154
335
70
-7
-7
46
59296
75354
-16058
-21.3
58786
510
Department of Employment
-40.0
1.5
-4.0
-4.5
13.7
0.9
For
Scotland
as
a
whole,
male
unemployment
Western
Isles (13.7%) were also significant.
net
increases were seen in all local authority
quarterly increase in female unemployment of 0.9%.
The
increase
Dumfries
was
and
greatest in
Galloway
with
the
areas.
Borders
both
areas
increases of 6.2%. The increase was next
and
seeing
moderate
in the Western Isles where the proportional change
was
only 0.4%. On the mainland, the increase
most
moderate
increase.
in
Again
Tayside
this
may
with
be
only
The
of
these
changes
was
significant variations both
a
moderate
within
Scotland
and compared with changes in male unemployment may
reflect
the
more
seasonal
nature
of
female
unemployment patterns.
was
a
1.1%
indicative
effect
The
increased by 2.8% between December and January and
of
a
changing trend.
Female
areas
unemployment rose in all
local
authority
between December and January. The
increase
was greatest in the Borders with a % change of 8.6
in
monthly total. Tayside saw the
increase
Female unemployment
of
1.6%
with
Orkney
most
a
moderate
close
second
(1.8%).
In
the
twelve
unemployment
This
months
fell
to
January
1950
by 21.3% to stand
represents 5.7% of the female
female
at
59,296.
workforce
or
(6.1% of the narrowly defined workforce) which
is
Vacancy levels
The relationship between unemployment and
levels
increases
vacancies reported in each local authority area is
quarter
in
female
unemployment
in
and the month to January 1990
both
but
the
is
addressed in Table 4.
The
vacancy
well below the total unemployment rate. There were
number
of
there
were notable variations between the regions.
Throughout Scotland there were declines in
female
Table 4
Registered
reduction
was
vacancy
greatest in the Shetland Isles with a drop of
40%
1990
unemployment
of
over
the year.
The
the January 1989 total. In both
Orkney,
falls
areas
experiencing
21.3%
average for Scotland were
and
the
Grampian
of 30.1% were recorded
and
reductions in excess
Western
Isles
(22.1%).
The
the
fall
that for male rates and total rates.
the
lowest
rate with
3.3%
of
Total Vacancies
U/V Ratio
(25.8%)
was
Female unemployment rates follow a similar pattern
was
January
and
smallest in the Borders (14.4%).
to
unemployment/
other
of
Lothian
vacancies* and
(U/V) ratios by region,
Borders
430
(559)
5.66
(3.73)
Central
1268
(1402)
8.64
(7.73)
435
(585)
11.34
(7.44)
912
(1091)
14.71
(12.14)
Dumfries
8 G/way
Shetland
the
female
Fife
a
low
Grampi an
3283
(3554)
3.44
(3.12)
with
Highland
947
(1302)
9.39
(5.86)
have
Lothian
2591
(3892)
10.43
(6.90)
comparatively healthy female labour markets.
Strathclyde
9737 (11639)
12.56
(10.37)
Tayside
1130
(1778)
13.55
(8.41)
Analysis
Orkney I s .
66
(70)
7.86
(7.04)
Shetland I s .
65
(75)
6.40
(5.47)
Western I s .
46
(70)
35.54
(20.84)
workforce
rate
out
of
of work. Grampian also has
3.6% and the Borders
respective
rates
of
totals
over
reveal
a
of
4.1%
and
the changes in
the
and
different picture
in
twelve
authorities
4.2%
female
three months
changes
Lothian
to
from
also
unemployment
January
the
quarterly
the male labour force. Seven
saw
decreases
1990
of
in
the
female
Scotland
20910 (26017)
10.48
(8.23)
unemployment with the largest reduction in Central
and
Shetland where the proportional changes
were
4.5%. In Strathclyde the fall was only 0.4% of the
October
total
and
whilst
the
moderate
proportionally
the
increases
were much greater. Between October
and
there
unemployment.
(17.9%),
was a 28.2%
The
Dumfries
increases
increase
in
in
the
and Galloway (15.3%)
*
were
generally
January,
in size,
reductions
Unfilled
Vacancies
at
Job
+
female
Figures
in
brackets
refer
the
to
situation last quarter (July 1989)
Borders
and
Centres
Careers Offices.
Source:
49
Department of Employment
the
and
The unemployment/vacancy ratio is intended to give
a
Table 5: TTWAs
with unemployment rates above
the
Scottish and regional average, July 1989
broad indication of the numbers
unemployed
people
competing
of
for
registered
each
vacancy.
However, since registered vacancies represent only
a proportion of the total number of unfilled jobs,
the real unemployment/vacancy ratio will be
No of
TTWAs
No above
No above
than
Scottish
+
Average
Regional
+
Average
be
lower
as indicated in the table. This effect
partly
offset
registered
by
the
unemployed
fact
that
people are
will
not
likely
only
to
be
competing for the vacancies.
Borders
5
0 (0)
3 (3)
In
Central
3
2 (2)
1 (1)
vacancies
January
1990,
there
notified
were
to Job
20,910
Centres
unfilled
and
Offices. This is 19.6% down on vacancies
Dumfries
7
3 (2)
3 (3)
in
Fife
3
2 (2)
1 (2)
seasonal
Grampian
9
1 (1)
8 (8)
Christmas.
Highland
8
5 (3)
5 (4)
vacancies over the quarter which suggests that not
& G/way
October and this will to some
Careers
reported
factors
degree
industries
1 (1)
1 (1)
all
9 (7)
4 (5)
variations. Proportionally, the fall was
Tayside
7
2 (2)
2 (2)
in Tayside where there were 36.4% fewer
Scotland
57
25 (20)
28 (29)
the change is
January
attributable
compared
with
to
October.
increases
Figures
in
brackets
refer
to
of
seasonal
greatest
vacancies
The
least
significant fall was noted for Orkney.
Declines in vacancy levels coupled with
+
for
All regions saw falls in the level
3
in
reflect
prepared
12
Lothian
Strathclyde
of
as
in
increases
the
unemployment
in
have
quarterly
resulted
unemployment/vacancy
in
ratios
throughout Scotland. The ratio is greatest in
situation last quarter (Oct 1989).
the
Western Isles where it is 35.54, a big increase on
last quarters 20.84 . This is more than double the
Source:
next
Department of Employment.
highest
14.71.
level as seen in Fife where
it
Ratios in excess of the 10.48 average
Scotland
Strathclyde
Comparing
with
(11.34). The ratio is largest in Grampian where it
unemployment levels can be useful but caution must
is 3.44 with the Borders the next closest at 5.66.
number
of
vacancies
noted
(12.56)
for
(13.55),
presented along with an unemployment/vacancy ratio
calculated using the figures contained in Table 1.
the
were
is
for
and
Tayside
Dumfries
and
Galloway
be exercised for a number of reasons.
Intra-regional variations
Data
is
notified
only
on
unfilled
vacancies
to Job Centres and Careers Offices.
But
From
only about one-third of vacancies
are
significant variations in the fortunes of regional
and these tend to be for lower paid
and
nationally
notified
available
lowei—skilled
jobs. Hence from published
vacancy
Tables 1 to 4 it can be seen that there
labour market located throughout Scotland.
these
local
data, a complete picture of the current demand for
disparities
labour cannot be formulated.
to
authority
boundaries
such
intra-regional
Within
however,
also occur. This section is
consider
are
intended
variations
in
unemployment. The data used to this end relates to
(TTWAs).
A
TTWA
Job Centres mainly deal with openings for over 18s
travel-to-work
areas
for which unemployment
whilst Careers Offices deal with opportunities for
smallest
young persons under 18 years of age. Vacancies are
calculated
usually recorded to either Job Centres or
contained
Offices but
Careers
may occasionally be notified to
services or to more than one Job Centre
both
and hence
area
and
is an approximation
labour market where most
is
the
are
rates
to
a
self-
commuting
to
and from work occurs within the TTWA boundary.
In
mainland Scotland, there are 57 TTWAs. Each Island
count.
area is classed as a TTWA and hence disparities in
There is likely to be some evidence of measurement
unemployment situations which occur within Orkney,
error as a result.
Shetland
may
be included in more than one
vacancy
50
and
the Western Isles cannot
be
drawn
Table 6
TTWAs with highest and lowest unemployment rates
Unemployment
+
+
Rates
High - Low
Borders
H Peebles
L Galashiels
Central
(6.1)
(3.3)
3.2
(2.8) 1.84
(1.85)
H Alloa
L Stirling
11.9 (11.9)
7.5 (7.5)
4.4
(4.4) 1.59
(1.59)
Dumfries
& G/way
H Cumnock/Sai
Cumnock/Sanquhar
L Annan
16.6 (17.7) 11.0 (13.2) 2.96
5.6 (4.5)
(3.93)
Fife
H Kirkcaldy
L North East Fife
10.3 (10.0)
5.8 (5.6)
4.5
(4.4) 1.78 (1.79)
Grampi an
H Forres
L Aberdeen
11.9 (11.8)
3.3 (3.3)
8.6
(8.5) 3.61
(3.58)
Highland
H Sutherland
L Inverness
13.2 (11.2)
7.3 (6.5)
5.9
(4.7) 1.81
(1.72)
Lothian
H Bathgate
L Haddington
(9.3)
(4.5)
4.4
(4.8) 1.83
(2.07)
Strathclyde H Greenock
L Oban
14.2 (13.7)
6.9 (5.2)
7.3
(8.5) 2.06
(2.63)
Tayside
9.3
5.7
3.6
(3.5) 1.63
(1.66)
+
H Arbroath
L Perth/Crieff
7.0
3.8
,
+
High / Low
9.7
5.3
(8.8)
(5.3)
Figures in bracket refer to the situation last quarter (October '89)
Source: Department of Employment.
51
from TTWA statistics. They are thus excluded
from
eight of the nine TTWAs having unemployment
the
have
above the regional average. It is the large,
following
focused
only
tables. In this
on
the
wider
section
based
we
unemployment
rates.
rate
Aberdeen which is pulling down the
rates
low-
regional
employment rate. Tayside illustrates the reverse
with Arbroath pulling up the regional averages.
Table 5 indicates the number of TTWAs contained in
each
region
and
unemployment
regional
TTWAs
number
of
TTWAs
average. If the majority of
with
and
Further
indicators
distribution
region's
comparison
have unemployment rates above the
Scottish
unemployment
then this is an indication of
unemployment
example
of
contained
area. The Borders
the converse with none of
within the region
having
a
general
is
a
the
good
TTWAs
the
Dumfries
provides
an
example
of
an
the
highest
and
from
lowest
rate to be found in each
range of rates witnessed in each
exhibiting
characterised
of
TTWA
region
as
calculate
region
and
unemployment
good example with all but one of the
Scotland.
intra-regional
the ratio of the highest to the lowest rate.
also a
having rates below
the
indicated in Table 6. It is possible to
rates above that average for Scotland. Grampian is
TTWAs
of
of unemployment can be gleaned
a
average
high
the
rates in excess of the Scottish
nine
Strathclyde
area
generally
by high unemployment with
nine
of
and Galloway continues to be the
region
the biggest range in rates within
the
unemployment rate in Cumnock and Sanquhar some 11%
more
is
slightly
lower than the 13.2% range reported last
than
in Annan. However,
this
quarter.
the regions twelve TTWAs having unemployment rates
The
where
3.2%
above the Scottish 8.8%.
separate the rate in Peebles and Galashiels.
Last
range is smallest in the Borders
quarter, the range was only 2.8%.
Comparing the unemployment rates in TTWAs with the
regional
average is useful in identifying
regional
areas with significantly above or
intra-
The
ratio
of unemployment rates is
greatest
in
below
Grampian where unemployment in Forres is 3.61 time
average unemployment. If the majority of a regions
greater than the rate in Aberdeen. A high ratio is
TTWAs have rates in excess of the regional average
also evident in Dumfries and Galloway where it
is
then
2.96.
is
this indicates the presence of a few
areas,
possibly even one with below average unemployment.
Grampian
serves well to illustrate the case
The ratio is lowest in Central where it
1.59 but it is also low in Tayside 1.63.
with
52
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