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PA MediaThe contraction in the oil and gas sector was linked to economic \u2018underperformance\u2019 in Scotland\u2019s north east PA Media<\/p>\nGovernments at Holyrood and Westminster are being urged to make economic growth their top priority in the wake of a new report highlighting the \u201cunfavourable divergence\u201d between Scotland\u2019s north east and the rest of the UK.<\/p>\n
Aberdeen and Grampian Chamber of Commerce (AGCC) said its latest quarterly economic survey showed businesses coming under \u201csevere and sustained pressure\u201d.<\/p>\n
It added that analysis suggests \u201cmuch of the region\u2019s underperformance reflects the ongoing contraction in oil and gas\u201d \u2013 warning that falling confidence in the sector and delayed investment was impacting supply chains, jobs and spending power in the north east.<\/p>\n
The research, carried out together with Gilson Gray LLP \u2013 found \u201cconcerningly\u201d that just 10% of businesses in the region increased their workforce in the first three months of 2026, with this said to be the \u201clowest mark since the depths of the pandemic\u201d.<\/p>\n
This was \u201cin stark contrast to the UK picture\u201d, where the report said that \u201cdespite severe national business headwinds\u201d almost a quarter (22%) of firms had increased their headcount over the period.<\/p>\n
Issues around both taxation and business rates are \u201cholding back businesses\u201d in Aberdeen and Grampian, the report added, saying companies in the area \u201creport being under significantly higher cost pressure than UK peers, particularly around labour, utilities, and raw materials\u201d.<\/p>\n
In the first three months of 2026 almost a third (32%) of UK businesses reported increased sales but this only happened for 17% of firms in the north east.<\/p>\n
Meanwhile almost half (45%) of firms in the region saw sales decrease in the first quarter, compared to 26% of UK businesses.<\/p>\n
The report stated: \u201cBusinesses overwhelmingly believe that neither the UK nor Scottish Governments have enabled economic growth in the north east of Scotland over the past five years.<\/p>\n
PA MediaThe contraction in the oil and gas sector was linked to economic \u2018underperformance\u2019 in Scotland\u2019s north east PA Media<\/p>\n
\u201cOver 90% rated the UK Government poorly, with similarly negative views of the Scottish Government, highlighting a widespread lack of confidence in policy support for the region.\u201d<\/p>\n
AGCC chief executive Russell Borthwick said: \u201cThis latest survey continues to tell a cautionary and concerning story of the north-east economy, with results once again showing a clear and growing gap between our region and the rest of the UK.<\/p>\n
\u201cWhile businesses across the country are facing headwinds, the scale of divergence we are seeing here points to something structurally different.<\/p>\n
\u201cWeak demand, worsening cash flow, lower investment and falling employment are not isolated indicators \u2013 together they paint a picture of a regional economy under sustained pressure.\u201d<\/p>\n
Mr Borthwick continued: \u201cThat is why growth must now become the top priority. Government should be doing everything possible to unlock investment, strengthen confidence and create jobs.\u201d<\/p>\n
Adding that there is potentially \u00a317.5 billion of investment in the North Sea which is \u201creportedly ready to go\u201d, he insisted that \u201cministers have a major opportunity in front of them\u201d.<\/p>\n
He went on: \u201cGrabbing that opportunity would support employment, boost supply chains, improve energy security and generate substantial value for the wider UK economy.\u201d<\/p>\n
Findlay Anderson, partner and head of corporate at Gilson Gray LLP, said the survey showed north east businesses \u201coperating in an increasingly difficult environment, where caution is replacing confidence and resilience is being tested\u201d.<\/p>\n
Mr Anderson said: \u201cThe north east remains one of the UK\u2019s most important economic regions, with world-class strengths in energy, technology and international trade.<\/p>\n
\u201cBut without greater certainty and a more competitive operating environment, there is a real risk that investment and opportunity will continue to flow elsewhere.<\/p>\n
\u201cRebuilding confidence and creating the conditions for growth must now be a priority.\u201d<\/p>\n
Scottish Conservative energy spokesman Douglas Lumsden said: \u201cOut-of-touch SNP and Labour politicians must urgently back these common-sense calls from North East businesses.<\/p>\n
\u201cTheir reckless policies have decimated Scotland\u2019s oil and gas sector and had a devastating impact on the North East economy.<\/p>\n
\u201cEvery moment John Swinney and Rachel Reeves sit on their hands, more and more jobs are being lost from the sector.\u201d<\/p>\n
A UK Government spokesperson said: \u201cOil and gas production will be with us for decades to come, and we will manage existing fields for the entirety of their lifespan \u2013 while actively scaling up clean energy industries in the North Sea.<\/p>\n
\u201cSince July 2024, over \u00a390 billion of private investment has been announced into the UK\u2019s clean energy industries.\u201d<\/p>\n
Karen Adam, SNP candidate for Banffshire and Buchan Coast, however said: \u201cTime and time again, the Labour Party has led Scottish industry and workers up the garden path only to betray our energy sector and risk energy security, jobs and prospects of a clean energy transition.<\/p>\n
\u201cLabour\u2019s tax on Scotland\u2019s energy is hammering Scotland and especially the North East where we have seen promise after promise broken leaving our workers, our industry and Scottish bill-payers to pick up the pieces.<\/p>\n
\u201cFor as long as Scotland\u2019s energy remains in the hands of Westminster, we will continue to see investment stifled and jobs lost \u2013 our natural resources are simply a cash cow to Westminster.<\/p>\n
\u201cScotland is an energy superpower in a prime position to draw investment into our sector to create jobs, enhance our energy security and lower bills for people and businesses \u2013 through a fresh start with independence and an SNP Government on Scotland\u2019s side we will back our energy sector and build a wealthier Scotland.\u201d<\/p>\n
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