Scotland's financial services growth outstrips UK-wide pace

SCOTLAND'S business and financial services sector has grown at a faster rate than that of the UK as a whole over the past five years, creating 65,000 new jobs, according to new research from Bank of Scotland.

The findings show that the sector has grown by an average 4.8 per cent a year in Scotland compared with 4.1 per cent across the UK's since 2001.

Over the past year, output growth in Scottish business and financial services has also outpaced the UK average, with an increase of 6.4 per cent against a UK-wide rise of 5.4 per cent. That has contributed to overall economic growth north of the Border over the past year of 2.6 per cent, well above the long-term average of 1.9 per cent and close to UK wide economic growth of 2.8 per cent.

However, on a five-year view, the Scottish economy grew by an average of 1.9 per cent, against 2.5 per cent across the UK.

Tim Crawford, group economist at Bank of Scotland, said: "Scotland's economic performance has improved in the past five years and this has led to stronger employment and wages growth in Scotland than the UK average.

"The business and financial sector has been an important driver of Scottish economic growth and has seen the fastest employment growth in Scotland over the past five years."

But while the picture on services has been positive, the gap between manufacturing performance in Scotland and the UK as a whole has been widening. The manufacturing sector's output in Scotland declined at a rate of 2.2 per cent a year over the past five years, while across the UK output was unchanged.

Overall, the Scottish employment picture is strong, with total employment growth at 4.4 per cent slightly ahead of the UK average of 4 per cent.

Once again, the public sector showed strong employment growth in Scotland, with numbers rising 15 per cent in public administration, education and health, the second strongest after business and financial services. Today the public sector employs 30.5 per cent of Scottish workers, compared with 27.7 per cent across the UK.

Unemployment has fallen in the five years being examined. In June 2007 it was 2.8 per cent, down one point over the past five years, closely in line with the UK claimant count average of 2.7 per cent, which fell 0.4 points over the period.

The average Scot now earns 26,130, 6 per cent lower than the UK average of 27,940 - but the gap has narrowed from 9 per cent in 2001.