Fed up with all those doom and gloom predictions in the EU referendum campaign? The warnings of recession? The slump in house prices? The hit to household wealth? The threat to pensions?
We’re sick to death of it. It’s not as if there’s nothing else to worry about – from murderous Muslims to the harum scarum mood in markets. But Project Fear has gone way over the top.
We suspect it’s working now to boost support for Vote Leave.
Now we haven’t pulled our punches here on the faltering performance of Scotland’s economy.
But the past few weeks have brought some better news and brighter moments – hard to believe given the deluge of warnings and forecasts of plagues and boils if we don’t vote the way the Bullingdon Club wants.
In fact, it’s remarkable there are any good signs at all given all those bleak forebodings. My thanks to economist Ruth Lea for listing the encouraging signs. There are worries enough about the health of the global economy so we should treat these bright spots cautiously.
1. Recent pointers suggest that UK-wide growth, somewhat unexpectedly, picked up in the second quarter of the year, possibly reflecting overall improved market confidence, which, in turn, has reflected the firming of oil prices.
The improvement seems to be despite the putative uncertainties surrounding the referendum on the UK’s membership of the EU on June 23.
2. Retail sales rose 1.3 % month-on-month to be 4.3% higher year-on-year in April despite lower spring clothing sales due to the cold weather.
3. Industrial production (15% of GDP) jumped by 2% month-on-month in April to be 1.6% higher year on year.
4. Within the total, manufacturing output (10% of GDP) jumped 2.3% month on month and was 0.8% up year-on-year. The largest contribution to the monthly increase in manufacturing came from the manufacture of pharmaceutical products & preparations, which rose by 12.5%, the largest rise since April 2009.
April’s figure suggests production is firming after some noted weakness since autumn 2015. Nevertheless, production and manufacturing in April were still 9.4% and 6.4% respectively below their 2008Q1 levels.
5. Our total trade (goods and services) deficit narrowed a tad to £3.3 billion in April. The visible trade deficit slipped to £10.5 billion in April as exports jumped by 9.1% month-on-month, the fastest rate since April 2010.
6. Output in the construction industry (6% of UK GDP) increased in April by 2.5% month-on-month, though still 3.7% down year-on-year. New work rose by 2.9% month-on-month. New housebuilding was up 3.1%in the three months to April compared to the three months to January.
7. The much-followed Markit/CIPS surveys for May suggested a modest pick-up in growth. Manufacturing and services both firmed a little, even though construction weakened. These indicators are encouraging.
8. The oil price has rallied to $50 a barrel, giving some hope to a battered North Sea sector that the worst may soon be over.
9. The National Institute of Economic and Social Research has calculated that GDP grew by 0.5% quarter-on-quarter in the three months to May, compared with 0.4% in the three months to April and 0.4% in 2016Q1.
In the run-up to the referendum, the economy seems to be fairly resilient.
10. UK financial markets have been resilient in the run up to June 23, despite all the expressed anxieties about “uncertainties”, though this could change significantly if there were a Brexit vote. The pound has comfortably held its own since the announcement of the referendum on 20 February.
Of particular interest with the EU referendum are the demographic prospects for the UK compared with other EU member states. Here, according to a Centre for Policy Studies paper out yesterday, the UK should emerge relatively unscathed by the relative economic decline across continental Europe.
11. The OECD forecasts that the UK’s GDP is expected to surpass Germany in the mid-2030s. And the UK’s population is also now forecast to surpass Germany’s in the mid-2040s, while the UK’s working age population is expected to be higher than Germany’s at an even earlier stage. From having four working-age people for every person aged over 65 years today, within a generation the EU will have just two working-age people to support those over 65.
12. The UK is projected to have the most sustainable old-age dependency ratio in EU by 2050, using the assumption that net immigration falls by half over the coming decades. The UK’s public pension system is judged the most sustainable of any major European economy and the UK also fares well on labour participation rates.
It’s hardly a prospect of unalloyed bliss – but rather more hopeful than the headlines of recent weeks have suggested. Keep this list to hand before another speech by Cameron/Osborne brings on an urge to slash your wrists.