The Scottish economy [October 1976]

In the July Commentary we suggested that the slow recovery in Scottish economic activity then under way would begin to fade early in 1977. Among the forces we saw to be stimulating that recovery were overseas exports, stock building, and the acceleration of manufacturing production in the rest of the UK. Factors working against recovery included public expenditure cuts, and stagnating consumer spending as real incomes fell. Events since July have suggested a dramatic weakening of the positive factors,and a strengthening of the influences depressing both demand and supply. We now think that aggregate output will at best show no more than a modest increase in the next six months