Understanding Scotland – Economy November 2022

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Our latest Understanding Scotland: Economy report continues to shine a light on people’s concerns about the impact of rising costs and the state of the economy.

The survey takes place against the backdrop of last week’s UK Government Autumn statement in which the Chancellor of the Exchequer confirmed that the UK is now in recession and announced a series of fiscal measures which may exacerbate public anxiety, at least in the short term.

The vast majority of Scots think that both their own financial situation and the economic health of the country have deteriorated over the last year, a view that is felt particularly strongly among those in lower socio-economic groups and in Scotland’s most deprived neighbourhoods. Despite this, we are slightly less pessimistic about future financial and economic prospects than we were in the last wave conducted in August, and it will be interesting to see what happens to that measure as after today’s announcement.

The cost-of-living crisis continues to have profound impacts on our behaviour, from reducing consumption of essentials and luxuries to impacts on mental health. There is little sign of the severity of the crisis making any differences to the tough choices we are facing in order to try and make ends meet.  And with winter looming and issues with the NHS high on the news agenda, it is notable that concern over the NHS is now the joint top issues of concern, alongside the cost-of-living crisis.

This issue explores these and other economy related issues and we continue to monitor and analyse how the public is thinking and behaving during these uncertain times.

Key Takeaways

This edition of Understanding Scotland brings you insights from over 2,000 members of the adult (16+) Scottish public on the most important aspects of our society and economy.

  1. There is a near universal view that economic conditions are getting worse…
    93% think that economic conditions are worse now than 12 months ago, up from 89% in August. This is the highest level of negativity we have recorded to date and represents an increase of 25 percentage points since the beginning of 2022.
  2. And two-thirds feel their own financial situation is also deteriorating
    This negativity is not felt evenly through the population with those in Scotland’s most deprived neighbourhoods significantly more likely to feel their situation worsening. Just 5% of people think that their financial situation has improved in the last 12 months.
  3. The public mood on the economy has moved dramatically in the last 12 months
    The net score on economic conditions (those saying economic conditions have improved minus those saying they have got worse) is -91 percentage points; this is a dramatic increase in negativity from -58 points in January 2022. Similarly, the net score on individual financial situations has fallen from -34 points in January to -60 points now,.
  4. Dissatisfaction with income levels remains high
    46% of respondents are dissatisfied, either somewhat or very, by their income level. Income dissatisfaction is not felt evenly across the population, with those from lower social grades, those from Scotland’s most deprived neighbourhoods and those out of work or unable to work being significantly more dissatisfied than others.
  5. Many people are tightening their belts and even foregoing necessities
    More than two-thirds of people (68%) have avoided putting their heating on, when they otherwise would have done, in order to save money. This is an increase of 14 percentage points from August. Other impacts of the cost-of-living crisis have remained relatively steady, including 67% cutting down on non-essential purchases, 62% cutting back on leisure activities and 24% losing sleep due to anxiety about personal finances.
  6. We can expect to see spending on any luxuries further reduced in the coming year
    When asked about spending on non-essential items in the next 12 months, there looks likely to be a significant downturn; for example, 12% expect to spend more on restaurants in the next year compared to 62% expecting to spend less; in October last year, 41% expected to spend more and 25% to spend less. This squeeze on expected spending may have significant impacts on businesses and on the ability to emerge from the current economic uncertainty.
  7. As winter arrives, the level of public concern about the nhs matches concern about inflation and the cost of living
    Almost half of people (49%) see the NHS as among the top three issues of importance facing Scotland, rising to 57% among those aged 65 and older. This may have been as expected given the imminent arrival of the winter months and extensive recent coverage of issues facing the NHS. Concern for the NHS now matches concern about inflation and the cost of living which stands at 48%.
  8. There has, however, been a modest reduction in pessimism about economic conditions in the next 12 months
    Around three quarters (77%) think that general economic circumstances will deteriorate in the coming year. Although this still represents a significant level of pessimism (and up from 62% in January 2022), it is a modest improvement from the 81% who believed the same in August. Similarly, 58% of respondents believe their own financial situations will worsen, down from 62% in August.
  9. The vast majority of us do not think that the economy works in the interests of most people, and this figure is rising…
    More than eight in 10 (82%) disagree with the statement that ‘the economy, as it is currently organised, works in the interests of most people, while just 6% agree that it does, giving a net score of -76 points. This represents a significant shift since this question was last asked in October 2021 when the net score was -60 points.
  10. …And most people think the economy works in the interests of the wealthy
    Eight in 10 (79%) agree with the statement that ‘the economy, as it currently organised, works primarily in the interests of wealthy people’ while just 9% disagree. The level of agreement in this statement rises to 83% among those who live in Scotland’s most deprived neighbourhoods.