If you ask your average business group lobbyist what they feel will be most difficult issue they will face this year, the answer would probably be “uncertainty”. Uncertainty is what often prevents companies from investing and hiring.
And if the latest Scottish employment figures and GDP measure are anything to go by, we could really use a little less uncertainty if we are going to improve slumping employment and joblessness rates.
The only trouble is 2017 is looking pretty risky on a global scale. At a business breakfast in Aberdeen yesterday, a crowd turned up early at the Ardoe House to hear about just some of the challenges employers are facing.
Stephen Boyle, chief economist for the Royal Bank of Scotland, embodies a rare mix – charm, wit and number crunching nous.
He set out the three main risks facing businesses and decision makers.
No one will be surprised that Brexit was the top item.
He reminded us that the fears were that even a vote to leave Europe would deliver a profound shock to the UK economy – which didn’t really happen.
Except, of course, for the collapse in the value of the pound sterling, as a result of which Mr Boyle predicts inflation will rise to 2.5%-3% by the end of the year, hitting pockets and eroding wages.
Following Prime Minister Theresa May’s speech setting out the UK’s plans for its European divorce, Mr Boyle reckons that the UK will be unlikely to secure trade deals as favourable those we now have with Europe, meaning productivity in the UK will likely be slower than it would have been had the UK voted to remain.
The next risk is the question on most everyone’s tongue: what will the Trump presidency bring?
A mixed bag, was the short answer. In the short to medium term, President Trump’s plan for tax cuts and infrastructure investment amounts to a big economic stimulus that could spill over to us on the other side of the pond.
But medium to long term, Mr Trump’s protectionist leanings could come back to bite him as countries stung by the threat of import tariffs to the US retaliate, bringing global trade to a standstill.
The third risk is the currency of the market we voted to leave behind.
At the height of the Euro crisis in 2015, its leaders decided that the way forward would be closer fiscal and political union of member states to underpin the currency’s strength.
But this year, the risk lies with any sign of Brexity-Trump stylevoting for populist politicians in France, Germany or the Netherlands which could undermine what is still the UK’s largest trading partner.
You want certainty? Well you can’t have it. Not this year.
But to invite an obvious question – have we ever had it?
I can tell you the answer is no, we haven’t.
Without the benefit of hindsight, there is only risk. What will the price of oil be? How will France vote? Who will win the Scottish Cup?
Frankly, if there was no uncertainty life would be immensely dull.
Grappling with the unknown brings both risks and rewards. Such has it always been and so shall it always be.
Mr Trump’s protectionist leanings could come back to bite him.