Sluggish oil and gas sector slows Scotland’s economy

By DARA BUTTERFIELD

Scotland’s oil and gas energy sector is lagging behind in terms of growth when compared to the rest of Scottish industry, according to a new report by the Scottish Chambers of Commerce.

The SCC’s Quarterly Economic Indicator, produced in collaboration with Strathclyde University’s Fraser of Allander Institute, shows survey findings for five of Scotland’s key business sectors: Construction; financial and business services; manufacturing; retail and wholesale; and tourism.

All other sectors looked positive with “buoyant trade” in construction and retail and tourism “looking forward to a successful summer”.

Liz Cameron, Chief Executive, Scottish Chambers of Commerce, said: “Our indicator for the second quarter of 2015 points to a Scottish economy where most business trends are positive and which is establishing a pattern of reliable growth, even if it is slower than we would like.

“The main exception to this overall pattern is within the N. Sea oil and gas service sector, where the performance and outlook of businesses was noticeably below the levels reported in other service sector firms.

This was true of businesses not just in Grampian and Tayside, but across the country, where oil and gas was the main focus of their business.

“It is clear that low oil prices, which have been a feature of the economy throughout 2015 are having a marked impact on Scotland’s oil and gas sector.”

SCC says Scotland’s financial and business services industry suffered its poorest quarter since being introduced to the quarterly surveys more than a year ago, and may even have contracted during the three months to June 30.

The report has said the Scotland’s financial and business services industry has had its worst quarter since the quarterly surveys were introduced saying: “This is in large measure as a result of a downturn in oil and gas service sector businesses.”

The report continued: “Long term low oil prices represent a challenge not only for the oil and gas sector and the north-east of Scotland but for every business in Scotland that makes up the supply chain.”