Scottish economy avoids recession with modest return to growth

Scotland's economy has avoided recession following a modest period of growth in the last quarter, figures published today show.

In the period from July to September output in the construction sector remained flat, but output in production grew by 0.9 per cent and output in the services sector grew by 0.2 per cent. Overall, the Scottish economy grew by 0.3 per cent, following a period of contraction in the previous quarter.

Over the year compared to the third quarter of 2018, the economy has grown by 0.7 per cent.

The report published with the GDP figures said: "In the last two quarters, a large amount of the change in GDP was linked to stockpiling and running down stockpiles around the UK's original planned Brexit deadline in March 2019 as it was moved to the subsequent October 2019 deadline."

The Scottish economy saw modest growth in the last quarter. Picture: John Devlin

Holyrood finance secretary Derek Mackay claimed the overall pace of growth had slowed as a result of the continued uncertainty around Brexit.

But Scottish Secretary Alister Jack called on SNP ministers to use the “considerable powers” at their disposal to grow the economy north of the Border instead of calling for an IndyRef2.

Mr Mackay said: “Scotland has a strong economic foundation with a lower unemployment rate than the UK and we will continue to do all we can to stimulate growth, jobs and investment and help build economic resilience.

"However, Brexit remains the biggest threat to our economy. Just this week the Prime Minister has put the risk of a ‘no deal’ Brexit back on the table by ruling out any extension to the transition period. This would be catastrophic for Scotland’s economy.

“Scotland did not vote for Brexit and the people of Scotland have the right to determine their own future free from Brexit as an independent member of the European Union.

“We are focused on delivering a stronger economy and will be renewing our Economic Action Plan in the new year."

The finance secretary spoke after the data showed Scotland's agriculture, forestry and fishing sector enjoyed growth of 1.3% for July to September - the highest growth rate of any part of the economy over the period.

Scottish Secretary Alister Jack said: “It is encouraging the Scottish economy has grown in the last quarter but I am concerned it continues to lag behind UK-wide figures over the last year.

“The UK Government is working hard to ensure that Scotland and every part of the UK grows and prospers. Getting Brexit done by agreeing the Prime Minister’s deal by 31 January, putting this uncertainty behind us, will be good for Scotland’s businesses, farmers and fishermen.

“I urge the Scottish Government to use the considerable powers at its disposal and work with us to improve the Scottish economy rather than holding it back with threats of a second independence referendum.”

Scottish Labour’s finance spokeswoman Rhoda Grant said: “While we welcome the 0.3 per cent growth in Scotland’s GDP during the third quarter of this year, the fact of the matter is compared to the same quarter last year Scotland’s GDP has grown only by a poor 0.7 per cent- behind the equivalent UK figure of 1 per cent.

“Questions need to be asked as to why Scotland’s economy continues to lag behind the UK. What actions are the SNP taking to improve their poor excuse for an economic strategy?

“The time has come for the SNP to put constitutional sabre-rattling aside and focus on how they can help ensure Scotland has a well performing and healthy economy.”