North Sea oil to boost Scottish economy but Brexit still risk, finds report

North Sea oil platform.
North Sea oil platform.
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A boost in the fortunes of the North Sea oil and gas industry should drive stronger growth in the Scottish economy but Brexit continues to pose a risk, a new report has said.

The latest State of the Economy report by Scotland’s chief economist Gary Gillespie confirms the Scottish economy strengthened in 2017 and continued to grow into the first quarter of 2018.

Figures published earlier this week showed GDP was up 0.2 per cent over January to March, compared to 0.1 per cent for the UK as a whole.

However growth was said to be “muted” in Scotland and the UK compared to global growth forecasts at close to 4 per cent for 2018 and 2019.

The report said the rebound in North Sea output, profitability and confidence following a difficult three-year period should support stronger growth in that sector and Scotland this year and beyond. Figures also pointed to a “positive” strengthening of production and manufacturing in Scotland but indicate a further contraction of construction activity.

Mr Gillespie said, “As uncertainty remains over post-exit transition plans, we may see increased volatility in economic data as firms bring forward activity such as stock purchases, to hedge against disruptions in supply lines or invest to consolidate supplies.”