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Scottish economy ‘outperforming rest of UK’

Picture: Getty

Picture: Getty

  • by ANDREW WHITAKER
 

SCOTLAND’S economy moved out of recession between July and September last year, when gross domestic product (GDP) grew by 0.6 per cent, new figures show.

The third-quarter rise in GDP represents a reversal in Scotland’s economic performance, as the figures also showed a 0.4 per cent increase in the economy on the same period last year.

GDP received a boost from manufacturing, which showed the strongest growth with a 3 per cent increase.

However, construction sector output fell 0.4 per cent in the third quarter and by 7.1 per cent compared with the same time the previous year, Scottish Government figures showed.

The services sector, covering areas such as hotels and transport and accounting for about 72 per cent of the economy, grew by 0.3 per cent between July and September.

There was also a 0.9 per cent increase in the whole UK economy during the same period, with the sharp rise thought to be helped by spending on the Olympics.

The rise in Scotland’s GDP was revealed as finance secretary John Swinney prepares to deliver the SNP’s budget at Holyrood on Wednesday.

Mr Swinney said: “These figures show that the Scottish economy has returned to growth after two quarters of contraction.”

He said Scotland was out­performing the UK as a whole, as he highlighted a first estimate of British GDP for October to December 2012, which indicated the UK economy contracted by 0.3 per cent, threatening a triple-dip recession.

He added: “There is no room for complacency. Recovery remains fragile – demonstrated by last week’s flash estimate of a contraction in UK output during Q4 [quarter four] 2012 – and the UK government’s continuing inaction risks a return to recession for the third time since the financial crisis of 2008.

“In contrast, the Scottish Government will continue to do all it can to strengthen economic growth and create jobs. Next week, we will conclude our nego­tiations with parties across parliament to deliver a Budget for jobs and growth.

“Our Budget prioritises construction, skills, employment and a green economic stimulus.”

Scotland’s electricity and gas production rose 1.9 per cent between July and September. The tourism sector did not perform as badly as feared and, included in the figures for the “distribution, hotels and catering” sector, it grew by 1.1 per cent.

The large business services and finance sector increased by 0.9 per cent, but there were falls in transport, storage and communication – down 1.5 per cent.

Liz Cameron, chief executive of the Scottish Chambers of Commerce, warned the under­lying performance of the economy “remains pretty much flat”.

She said: “The good news is that there is capacity for growth in our economy and that businesses across the country are well placed to take advantage of the new opportunities that will arise from an upturn in demand.

“Coupled with the right level of support from government, we are confident that meaningful growth can return to our economy, but 2013 will be a challenging year.”

However, Labour finance spokesman Ken Macintosh said: “Today’s third-quarter figures show our economy is flatlining and confirm … we are trapped between two governments making all the wrong decisions for the Scottish economy.”

Scottish Conservative finance spokesman Gavin Brown said: “Alex Salmond vowed to spend almost £500 million on construction project in the past two years and has failed miserably to deliver on this promise.”

 

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