Understanding Scotland – Economy November 2023

This Understanding Scotland – Economy report continues to draw attention to the diverse strategies that Scots are taking to cope with the cost-of-living crisis, while highlighting some declines in negativity.

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In the midst of economic uncertainties, Scots maintain a nuanced perspective, with pessimism lingering but to a lesser extent than in previous waves of this research. While acknowledging economic difficulties, there is a noticeable moderation in negativity. Concerns about general economic conditions, while prevalent, have also subsided from previous waves of Understanding Scotland.

The prevailing sentiment about Scotland’s trajectory remains steady, with a majority expressing a belief that the country is heading in the wrong direction. Notably, women and the youngest generation (16-34) are less likely to exhibit this pessimism.

Healthcare and the cost of living continue to dominate public priorities. The cost of living remains a paramount concern, reflecting the enduring impact of economic pressures. Additionally, there is an increased focus on poverty, indicating a shifting landscape within economic considerations.

Belief that the structure of the economy favours wealthy individuals andbusiness persists. Younger Scots tend to perceive the economy as favouring business, revealing a generational perspective.

While there are improvements in income adequacy, dissatisfaction remains notable. Concerns about emergency expenses underline financial fragility, especially for households with children.

Coping with economic challenges, Scots are adjusting spending habits and showing resilience. Financial stress is evident, with a significant proportion reporting losing sleep due to financial worries.

On a more positive note, there is improved confidence in securing another job within three months if they had to, reflecting changes in the labour market. These findings highlight a populace navigating an ever-evolving economic landscape, characterised by subtle shifts in outlook and behaviour.

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. Scots struggling to navigate turbulent economic times

Three in ten Scots (29%) are losing sleep over their personal finances. Others are taking a host of strategies to pay for rising expenses, including one in five (21%) using a ‘buy now pay later’ payment plan, 16% borrowing money from family and friends to cover higher prices, and 30% cutting back on donations to charity. Food remains a challenge for a significant proportion of Scots, with 17% reporting skipping meals and 26% cutting back on fruits and vegetables.

2. Concerns about emergency expenses continue

A lack of confidence in covering a £100 emergency expense has increased to 28% from 25% in February 2023, but for a more significant expense of £500, uncertainty rises to 49%. This indicates that many Scots are in a situation of severe financial fragility. Notably, 34% of households with children lack confidence in covering a £100 emergency expense.

3. Scots remain pessimistic about the economy but less so than before

Despite a slight reduction in negativity, 73% perceive general economic conditions as worse than a year ago, down from 80% in August 2023. Looking ahead, 61% of Scots anticipate a worsening of general economic conditions in the next 12 months, while 39% expect their personal finances to deteriorate, down from 42% in August 2023. For those aged 45 and above, pessimism dominates, with 75% perceiving current economic conditions as worse than a year ago.

4. Wealthy interests prevail in the eyes of Scots

Scots overwhelmingly perceive the economy as favouring the wealthy (78%), while 53% believe it serves business interests. This trend is more pronounced among younger Scots: those 16 to 34 are more likely to view the economy as working primarily for business and the wealthy. Only one in ten (10%) believe that the economy works in their own interest.

5. The majority continue to think Scotland is heading in the wrong direction

Since August 2023, there has been a stable outlook, with 55% of Scots believing the country is heading in the wrong direction. This sentiment is particularly pronounced among men (59%) compared to women (51%) and those aged 55 and above (62%) compared to the youngest generation (46%).

6. Healthcare and cost of living continue to dominate priorities of Scots

Healthcare (48%) and cost of living (42%) remain among the top three concerns for Scots. Notably, cost of living concern has witnessed a decline of six percentage points, reflecting a shift in public focus from August 2023. These concerns are greater among those aged 16 to 44 and households with children.

7. Cost of living retains paramount status among economic priorities

Over three-fifths of Scots (62%) view the cost of living and inflation as a key economic priority, though this is down five percentage points from August. Poverty sees an uptick, becoming a significant concern for 32% of respondents, up three percentage points from August.

8. Incremental improvements in adequacy of incomes with lingering dissatisfaction

Satisfaction with income covering the cost of living has increased modestly to 37%, but dissatisfaction remains high at 45%. Satisfaction with the ability to meet household bills and balance commitments has improved.

9. Shifting confidence in employment prospects

Confidence in securing another job within three months has significantly improved, with 50% expressing confidence, contrasting with 57% lacking confidence in February 2023. This shift indicates a more positive perception of job market prospects among Scots.

10. Mixed views on relationship between economic growth and environmental prosperity

While one in two (49%) agree that economic growth improves wellbeing for an average member of society, a similar number (48%) believe that there is conflict between economic growth and environmental prosperity. Notably, this conflict perception has decreased by 11 percentage points since October 2021.