Monday, June 20, 2005

Scotland is set to narrow its growth gap with the rest of Britain helped by an unexpected rise in inward migration

BBC News:

According to Ernst & Young, the Scottish economy is set to outperform the UK as a whole in 2005 after a disappointing performance last year.

Scotland's economic prospects, under threat from a falling population, were boosted by a rise in migration in 2004.

Newcomers were attracted by cheaper housing and good job prospects.

The difference between Scotland's economic output and that of the rest of the UK is expected to fall from 1.2% last year to 0.7% in 2005.

This would bring it into line with the average figure for the past seven years after Scotland fell further behind the rest of the UK in 2004.

Although the economy is expected to slow slightly this year - output declining from 1.9% to 1.8% - it will perform better than the UK as a whole thanks to more vibrant retail sales and healthy job creation.

Optimism about the country's long-term economic prospects has been clouded by fears of a decline in population.

Although the number of deaths outstripped births by 4,000 in 2004, Scotland benefited from a net gain of 26,000 migrants, a much higher figure than expected.

E&Y said the rise in arrivals could be attributed to housing being much cheaper than in the south of England while employment prospects were just as good due largely to a rise in public sector jobs.

"The idea of an irreversible decline in the Scottish population needs to be revised," said Dougie Adams, chief economic adviser to Ernst & Young's Scottish Item club.

"In the past, periods of gain from migration have tended to coincide with recession in the greater south but this latest experience looks different."

However, Mr Adams said the figures should be treated with some caution in terms of future trends because they may have been distorted by the admission of ten new countries to the EU last year, which resulted in many young workers moving to western Europe.

Of course, relocating British colonists from the north of Ireland to Scotland would also help boost the future growth of the Scottish economy.

Migrants labouring to boost Scotland's economy


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