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Scottish jobs will be “destroyed” during tough coronavirus measures as lockdown continues to batter the economy, business leaders warn.

Tim Allan, president of the Scottish Chambers of Commerce, said many firms already weathered the “most challenging year in living memory” in 2020.

He warned of a recession and jobs crisis caused by the pandemic “which will likely takes years to recover from”.

Meanwhile Mairi Spowage, deputy director of the Fraser of Allander Institute economic think tank, said joblessness is likely to “rise significantly” when the UK Government’s furlough scheme is wound up at the end of April.

The latest chambers of commerce report on the economy, covering the final three months of 2020, showed business confidence in many sectors was still gloomy.

a man preparing food inside of it: Scotland's economy has taken a battering. © Getty Images Scotland’s economy has taken a battering.

Allan said: “We were hoping 2021 would be a better year than 2020 but it seems it is always darkest before the dawn.

“We fear that restrictions to prevent the spread of the new variant of the virus will continue to destroy more jobs and businesses, unless Government support can ease the impact of closures and deliver an environment to enable economic recovery.”

The tourism sector, a key part of Scotland’s economy, had “fragile levels of confidence”, the latest report said, with a negative net balance of – 62%.

The quarter-four results show nine in 10 firms reported a fall in sales compared to the second quarter of 2020.

The sector was also hit by “significant falls” in investment, with more than three-quarters of firms reporting staffing levels had remained the same or been reduced.

More than three-quarters of tourism firms reported falls in cashflow and profits.

In the retail and wholesale sector, confidence “remains subdued”.

In the construction industry, almost half of firms reporting a further fall in total sales in the period October to December.

However in manufacturing, confidence was positive for the first time since the second quarter of 2019 at +2%, the report said.

Looking ahead, Allan said: “Investment, particularly in green jobs and energy transition, will be key if the economy is going to be built back better and sustainably.

“For this to happen, governments at all levels must be prepared to work hand in hand with the business community to attract and focus investment on where it will have the greatest impact.”

Spowage said the economic survey shows the hospitality and tourism industries have been “badly impacted, with further lockdown measures likely to cause more hardship for the industry”.

She added: “Other industries, such as construction, have been able to adapt to the restrictions they face and operate almost at full capacity, but possible announcements on further restrictions for this sector are likely to act as a new blow.”