Developments in recent economic data for both the UK and Scotland are largely positive, if predictable. The economy slowed again during the second lockdown, but is now showing firm signs of picking up once more, albeit with a slight lag for Scotland (and indeed Wales) presumably related to a somewhat more cautious approach to lockdown release. All being well on the Covid front, recovery should continue and probably accelerate in the months ahead.

However, the longer-term story remains clouded in uncertainty – with no real enhancement of clarity resulting from the main parties’ manifestos for this week’s Holyrood elections.

Consider first some key data. UK gross domestic product rose by 0.4 per cent in February, having declined by 2.2% in January. The growth in Scotland in February was a touch more at 0.9% (but do remember these are only first estimates). However Scottish GDP is still 7.4% below the level of last February, the last pre-pandemic month, and 3.3% below last October. Clearly there is stacks of room for more growth, and it is most encouraging that the UK composite purchasing managers’ index for April rose to 60 (any reading above 50 indicates growth), the highest level since November 2013. Growth came from services as well as manufacturing, and firms remained distinctly positive about the future.

We can expect the Scottish PMI figures to be a touch less exciting, due to the lag in easing some elements of lockdown, with hospitality et al yet to join the positive vibe of other components of the service sector.

One further point to note from the latest data is that both exports to and imports from the EU have declined by some 15% to 20% compared to a year back. We must hope that some of this decline is a temporary rather than permanent Brexit effect. Watch this space. The First Minister should note that the movement away from free trade flows with a key trading partner really does matter.

The positive elements of this story are all consistent with buoyant UK retail sales – up a massive 5.4% in March. These UK sales data were no doubt aided and abetted by the remarkable and most encouraging performance of the labour market.

The UK unemployment rate edged back down to 4.9% in the quarter to February, far better than expected/feared. However, the Scottish unemployment rate has continued to increase, and we must not forget that 21% of the Scottish workforce is still furloughed.

The unemployment story also needs close attention, with a positive trend here necessary if the lockdown-induced increased savings of a sizeable chunk of the working population are to be converted into sustained increases in spending across retail, hospitality, et al.

One further note of caution is that inflation is edging upwards, from an historically low level, and more increases (eg for household energy bills) are known to be in the pipeline. At 0.7% the annual consumer prices index inflation rate remains well below the Monetary Policy Committee’s 2% target, but rapid acceleration from here could lead to an earlier-than-expected, and worrying, rise in interest rates.

In sum, however, the short-term story is sound and the outlook more encouraging than we had dared to expect. Looking beyond the short term, recovery remains problematic. None of the Holyrood manifestos sets out a clear strategy for achieving a high-investment, high-skill, enhanced productivity growth path.

There are passing references to training and skills but no consideration as to why Scotland has recently achieved the unwelcome combination of higher spend per head on education than England with a relative decline in education outcomes – as objectively measured by PISA (the Organisation for Economic Co-operation and Development’s Programme for International Student Assessment). Skill development is contingent upon a recovery of educational outcomes to the relative strength that was once taken for granted; and for that strength of achievement being spread across all segments of the population.

The SNP guarantees – of a place at a university/college or an apprenticeship or a job for all school leavers and six months public sector employment for all out-of-work 25-year-olds – sound great. But what we really need is a rapidly expanding innovative economy with growing demand for skilled workers alongside a growth of suitable skills availability from both those entering the labour force and those already employed but with aspirations to enhance skills and progress. There is no magic potion available, but clarity on objectives is an essential starting point.

It is excellent that we have analysis available for this election from the likes of Oxford Economics and the Institute for Fiscal Studies (IFS). The latter accuse the three main parties of “hiding from fiscal reality” in their manifestos. The implication is that their public expenditure promises are not affordable without significant increases in funding; and that increased funding will have to come from increased domestic taxation. Indeed the IFS suggests that, given the expected position on UK funds for Scotland in the years ahead (via the Barnet formula) some public expenditure cuts in Scotland would have been required even before the additional manifesto commitments.

The health sector will be critical in any debate on public expenditure. Again according to the IFS, the excess health spend per head in Scotland as compared to England has declined from 22% in 1999/2000 to 3% in 2019/20. Understandably all the main parties want to spend more on health. But the question is whether this can be afforded without some combination of increased taxation on incomes and capital gains (as per President Biden in the USA) or sharp reductions in expenditure elsewhere within the public sector. Difficult choices will be required in the relatively near future.