Scotland business

Snow storms 'cost economy £200m-£300m'

Shoppers waling in the snow Image copyright EPA

The recent severe weather has cost Scotland's economy hundreds of millions of pounds, according to a leading economist.

Highlands-based Tony Mackay said many firms had been forced to close or cut back on production after snow storms hit most of the country last week.

He estimated the loss in Scottish economic output at between £200m and £300m over a three or four day period.

But he added that the figure could be substantially higher than that.

Mr Mackay told BBC Scotland: "Economic output in Scotland last year was about £375m a day on average and I reckon that the snow has reduced that by at least 20% - so that's a loss of at least £75m a day.

"We've had three or four days' bad weather so we are talking about a loss of between £200m and £300m.

"Some people have said to me that my 20% estimate is too optimistic and probably 50% is more accurate.

"If that's the case, it would be two or three times worse than that."

Image caption Mr Mackay said if the bad weather lasted much longer, some businesses "could go under"

Mr Mackay said output been hit in part by the fact that many people had not been able to get to work during the worst of the weather.

Many stores in snow-hit areas of Scotland ran short of basic items such as bread and milk after the "Beast from the East" hit deliveries.

Deputy First Minister John Swinney said on Saturday that shops were being "restored to their normal supplies".

Image copyright PA
Image caption Many stores ran short of essentials as the freezing weather took its toll on deliveries

Mr Mackay said: "I think the shops in particular have suffered very badly.

"The economy in Scotland is not doing well at the moment. We have got growth of just about 1% and a lot of businesses are in financial trouble.

"So if it is only a few days' bad weather, then okay - but if it lasts for longer then I think some businesses could go under unfortunately."

Stuart Mackinnon, external affairs manager for the Federation of Small Businesses in Scotland, said that "only in time will we have a good understanding of the economic impact of the recent poor weather".

He added: "It will be important, though, that institutions like the banks support smaller firms that might be facing short-term cash flow problems as a consequence of lost trade."

Meanwhile, experts have warned that the bad weather across the UK could hit Britain's economic growth in the short-term.

Economist Howard Archer, chief adviser to the forecasting group EY Item Club, said the snow's impact meant that the UK's first quarter GDP may be reduced by 0.1%, or up to 0.2% if the severe weather persists.

And retail expert Phil Dorrell said the big freeze could be a "disaster" for the high street as people staying home turned to more shopping online.

Related Topics

More on this story