Scotland’s economy is growing at the fastest rate since the financial crash after a boom in the construction industry.
The country’s economic performance is now 2.3 per cent above the pre-recession peak, according to official figures.
Scotland’s economy continues to show strength.John Swinney
But this is half the rate of the UK’s which has grown at 5.1 per cent above its pre-recession peak.
The figures were seized on by the rival parties in the election campaign, as Deputy First Minister and finance minister John Swinney insisted it undermines recent criticism from “Westminster parties” about the Scottish economy. Conservatives insisted the improvement was a “direct result” of the party’s economic stewardship at UK level.
The reason the UK grew faster is down to services, which account for three-quarters of the economy, and grew twice as fast at the UK level (3.4 per cent) compared with Scotland (1.7 per cent).
Scottish GDP grew by 0.6 per cent during the fourth quarter of 2014 and by 2.8 per cent compared to the fourth quarter of 2013.
Mr Swinney said: “Scotland’s economy continues to show strength, growing 0.6 per cent in the final quarter of 2014, with growth of 2.7 per cent across 2014 as a whole – the fastest since 2006.”
Growth in the latest quarter was driven by construction in particular, which rose by 6.1 per cent over the quarter.
A spokesman for Mr Swinney added: “These statistics also totally undermine the desperate claims from the Westminster parties about Scotland’s finances. We have raised more revenue per head for every one of the last 34 years, and with further growth in our onshore economy forecast to far outstrip any reduction in offshore revenues over the next few years, we are more than capable of paying our own way.”
The slowdown in services has been acute in business-related services which were down 0.2 per cent – the first fall in three years and a contrast with the speedy growth of 1.3 per cent seen at UK level.
Scottish Conservative finance spokesman Gavin Brown said: “This is a direct result of the careful economic management by the Conservatives, as macroeconomic levers are controlled by the UK government.
“Powerful growth is also projected for 2015 and the whole of the forecast period, so long as we stick to the long-term economic plan.
“That is why this election is so important. A vote for the Conservative party is a vote for continued stability and security. A vote for Labour or the SNP would put our economy at risk.”
Professor John McLaren, of the Fiscal Affairs Scotland think-tank, said the “sluggish performance” of the services sector was a concern.
He said: “In particular, the recent stagnant performance of the business services sector is worrying as, since 2010, it has very much lead the way in terms of the recovery and it continues to do so for the UK as a whole.”
Scotland’s economy has expanded by 7.5 per cent since the worst period of the crash in 2010. The UK meanwhile has grown by 11.7 per cent since this trough. This faster UK growth may be related to the fact that the UK suffered a greater fall in GDP than Scotland did between 2008 and 2010.
Liz Cameron, chief executive and director of Scottish Chambers of Commerce, said: “We all know that 2014 was an exceptional year on many levels. The challenge this year will be to sustain these growth levels.”
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