Businesses optimism may help fuel the Scottish recovery

February 2011 has seen Scottish business activity rise by 44% according to the Bank of Scotland’s purchasing managers index. Growing order books have resulted from a more relaxed approach to budgeting controls at many companies. Performance in Scotland has outstripped the average seen in the rest of the UK.

The benefit has been felt particularly in the manufacturing sector, which has also witnessed an increase in the level of employment. In general, new business growth is at its highest level for a year. Despite this, the service sector, a massive employer, has not enjoyed anywhere near the same success with continued cutbacks hitting workers hard.

Renewed economic growth is important to counteract the incredible set of circumstances currently facing Scottish workers. With many already carrying high levels of personal debt, inflation alongside reduced benefits, tax increases and wage stagnation represents a huge danger to thousands of families and threatens to greatly increase Scottish trust deed numbers.

It is hoped that increased business activity will help to keep a lid on the number of workers having to resort to serious debt solutions such as a Scottish trust deed. It should help to reduce the length of periods of unemployment following redundancies, and may help to counteract cost of living increases if some wage growth returns.

Periods of unemployment following redundancy are a key driver of the use of credit, which can reach unserviceable levels even when a new job has been found. As a result, even temporary unemployment can ultimately lead to the use of debt solutions such as a trust deed further down the line.

Pay stagnation is also causing pressure on family finances, eventually leading to debt payments being missed. Increased business activity is likely to lead to companies competing to attract the best workers, a scenario which generally pushes up wages.

It is hoped such business optimism translates into further business expansion and recruitment. Such a scenario is the best prospect for protecting some workers against the collective impact of so many negative economic factors.

Without business growth, Scottish workers are likely to experience lower pay and longer periods of unemployment within the context of such a harsh economic background. This scenario could result in an explosion in the number of Scottish trust deeds.

If you are suffering from debt problems and are considering a Scottish trust deed as a potential resolution then our trust deed forum is an excellent source of information, offering knowledge from industry experts as well as those individuals who are in similar situations themselves.

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