At first glance, you could be forgiven for thinking 2022 has begun much the same as 2021 – Covid cases hitting record levels, people working from home and fragile consumer confidence inhibiting demand across multiple sectors. Look a bit closer, though, and that déjà vu looks misplaced.
In spite of high levels of transmission, our outstanding vaccine programme has limited the health impact of Omicron. With far fewer people becoming seriously ill, we are in a far better position today than we were 12 months ago. New data even suggests we may have passed the peak of this wave, giving businesses further reason to feel optimistic once more.
Just this week, Scotland saw a further easing of restrictions – allowing many more firms to get back to trading their way to recovery. After a long cycle of limits on day-to-day operations, firms could be forgiven for expressing a loud sigh of relief. So, what’s next?
Firms will undoubtedly be looking to the Scottish Government for guidance on how we live alongside the virus. That doesn’t mean Covid is over, and it certainly doesn’t mean we become complacent. After all, this isn’t the first time we’ve felt hope that the pandemic was nearing its end.
Rightly, there is a conversation to be had between business and government about maintaining vigilance in the weeks and months ahead. However, the severe restrictions on economic activity experienced over the past couple of years should at least become a thing of the past.
That isn’t to say that getting here has been easy, or that businesses on the whole are out of the woods.
Some of those sectors most affected, particularly hospitality, retail and aviation, are still suffering the ill winds of dented demand and constrained consumer confidence – the loss of normal December trading was a particularly tough pill to swallow. Close monitoring of those sectors will be needed, with further assistance ready in the event that Covid again strikes at livelihoods.
In the immediate days ahead, there is another challenge in need of urgent attention. While the booster campaign has worked wonders, the increased virulence of Omicron means transmission has not been stemmed. Given the volumes of infection seen in recent weeks, and the ongoing need to isolate when afflicted, levels of sickness and self-isolation have hit hard across the economy – with both the public and private sectors suffering.
While 2022 may well be the year that business escapes the persistent clutches of the pandemic, there are some further clouds on the horizon. A looming cost-of-living crisis, rocketing energy prices and a tight labour market will all be occupying the thoughts of Scotland’s business community sooner rather than later.
But you also don’t have to look too far for opportunity. Just weeks into the new year, the award of ScotWind leases has provided a real fillip to the economy. Not only can we secure Scotland’s energy future with sustainable offshore wind, but the winning bidders – and the supply chains that support them – will bring huge economic rewards for everyone.
With opportunities and challenges very much on the horizon, businesses may have to be patient, treating those two imposters both the same until a much-needed period of stability comes along. Where I take most encouragement is in the knowledge that the business community is ready to drive Scotland’s economy forward once more. By boosting consumer confidence and unleashing private sector investment, we can secure economic recovery and make 2022 a renaissance year for Scotland.
At the CBI, we’ll be doing everything we can to cement the partnership between business and government we need to steer Scotland on the course for prosperity.
Tracy Black is director of CBI (Confederation of British Industry) Scotland
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