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Last Updated: Wednesday, 17 December, 2003, 15:36 GMT
Jobless rise despite optimisim
Sandy Murray
By Sandy Murray
BBC Scotland business staff

Unemployment in Scotland has risen by 6,000 in the past three months.

The surprise increase comes against a background of a growing economy - a trend confirmed by Scotland's leading economic think tank.
Job Centre Plus
Unemployment rose in the last quarter

The latest official figures show 148,000 people out of work in Scotland - 6,000 more than the previous figure.

However, unemployment is lower than it was at the same time last year and the longer-term trend is for fewer people to be without work.

The government is putting a brave face on the news.

Scotland Office minister Anne McGuire said: "The Scottish labour market is healthier than it has been for decades.

"While there has been some short-term deterioration, it is important to emphasise that the trend continues to indicate falling unemployment and rising employment."

However the SNP's economy and enterprise spokesman Jim Mather said the current measures of unemployment masked the true impact of economic under-performance.

"These figures are another significant indicator of Scotland's economic under-performance," he said.

"At a time when the world economy is picking up, Scotland continues to lag behind.

"What's worse, however, is that these figures, bad as they are, mask the true level of unemployment.

"They take no account of reluctant retirees, those who have dropped out of the economy altogether and Scots forced to move away in search of work."

The unemployment total is still falling elsewhere in the UK.

The figure for the whole of the UK dropped by a further 33,000 and now stands at 1.47m.

By traditional measures, unemployment in Britain is at its lowest level for 28 years.

This makes the news on Scottish unemployment particularly disappointing, but the general picture for the economy remains healthy.

The Fraser of Allander Institute at Strathclyde University has raised its forecast for growth in the light of increasing evidence that activity is picking up.

Export growth should pick up as growth in the US economy accelerates and as the Euro area begins to pick up
Professor Brian Ashcroft
Fraser of Allander Institute
But in its latest economic commentary it is warning that most of the growth is coming from the service sector.

It said Scotland can most accurately be described as a private service sector economy.

The share of employment generated by the public sector is no greater than it was in 1996.

The principle economic challenge for Scotland is to revive manufacturing industry, which has been in decline for more than three years.

Professor Brian Ashcroft, the author of the institute's commentary, does believe improvement is coming.

He said: "Export growth should pick up as growth in the US economy accelerates and as the Euro area begins to pick up."

But things will remain difficult for businesses exporting to the United States.

A fall in the value of the US dollar makes goods manufactured in Scotland - and other parts of Europe - increasingly expensive for American consumers.


SEE ALSO:
Jobless figures rise
12 Nov 03  |  Scotland
Sluggish Scotland avoids recession
29 Oct 03  |  Business
Manufacturing outlook 'bleak'
21 Oct 03  |  Scotland


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