£320m potential loss to Scottish economy following ‘critical blows’ to Scottish aerospace engineering and civil aviation
- Thursday 16 July 2020
Findings of Strathclyde University’s Fraser of Allander Institute highlight possible 5,000 sector job losses in report commissioned by Unite Scotland
Unite Scotland has today (16 July) released findings from a report produced by the nation’s leading economic research institute Strathclyde University’s Fraser of Allander Institute (FAI) which shows a potential £320 million blow to the economy and nearly 5,000 job losses across Scotland.
Scotland’s leading trade union commissioned the research in light of the substantial job losses over the previous months in both sectors. The report highlights that as a result of an estimated 1,500 direct job losses in civil aviation including companies such as Menzies Aviation and Swissport this will create a knock-on effect of job losses and spill-over effects in the wider economy leading to total job losses of around 2,330. The direct effect of these redundancies on gross value added (GVA) is around a £90 million loss to the Scottish economy. The overall economic impact is a loss of around £140 million to the Scottish economy after accounting for knock-on effects.
Scotland’s aerospace engineering sector is estimated to suffer an even bigger blow following a spate of redundancy consultations and voluntary severance schemes at Rolls Royce (Inchinnan), GE Caledonian, Spirit Aerosystems and Wyman Gordon. The total impact of the 1,225 proposed job losses, including spill-over effects, in the aerospace engineering sector is associated with a £185 million loss in GVA and a decrease in employment of 2,530 across the Scottish economy.
Following the release of the report’s findings, Scotland’s leading civil aviation and aerospace engineering trade union has warned that unless the Scottish and UK governments take urgent measures then both sectors could be on the brink of terminal decline. Unite has repeated its demands for a comprehensive strategy and support package for both sectors or there will be severe damage to the Scottish economy.
Graeme Roy, director of the Fraser of Allander Institute, said: “The full effects of the economic crisis from the COVID-19 shutdown are sadly only beginning to crystalise. The job losses announced already in key parts of our economy - including aviation and engineering - have the potential to be a damaging blow to Scotland's long-term economic prospects.”
Pat Rafferty, Unite Scottish secretary, said: “The findings in the Fraser of Allander Institute report commissioned by Unite into the critical blows our aerospace engineering and civil aviation sectors are enduring is eye-watering. Over the course of several months there is an estimated loss to the Scottish economy of £320 million and nearly 5,000 direct and indirect jobs are on the brink of being lost forever. This is the gravity of the situation facing both sectors and make no mistake about this both are on the cusp of terminal decline without immediate intervention from both the UK and Scottish governments. It’s essential that government gets all the key stakeholders in these sectors around the table immediately so that we can protect and save as many highly-skilled jobs as possible.”
Notes to editors:
- GVA is the value of all final goods and services produced within the economy in a given period of time and is used to measure economic growth. GVA can be expressed generally as the difference between revenue from sales and the cost of inputs.
- Unite Scotland is the country’s biggest and most diverse trade union with around 150,000 members. The union is led in Scotland by Pat Rafferty.