Scottish economy enjoys longest period of growth since 2001
The Scottish economy has seen its longest period of uninterrupted growth since 2001.
Today’s State of the Economy report, published by the Scottish Government chief economist, highlights that the Scottish economy saw its eleventh quarter of expansion at the start of 2015, recording growth across all main sectors of the economy.
The report notes that continuous growth over the last three years – despite challenging conditions – demonstrates the resilience of Scotland’s economy and has driven positive trends in the labour market.
Chief economist Gary Gillespie said the 11 consecutive quarters of expansion and upbeat forecasts for the future demonstrated the economy’s underlying resilience.
Employment levels reached record highs over the last year, unemployment is close to its pre-recession average rate, and there are now signs that real wages are rising.
These trends have combined with other factors – rising house prices, growing consumer confidence and low inflation – to boost household incomes and spending, which have been positive for the economy.
However, both internal and external challenges remain. For example, from further tightening of budgets by the UK Government, the impact of low oil prices on oil and gas sector profitability and investment, and subdued demand in global export markets alongside the strength of the pound.
Mr Gillespie said: “Growth in household income has not kept pace with consumption, resulting in the savings ratio in Scotland falling, therefore a pick-up in productivity and real wages is needed to support consumption patterns.
“With employment now hovering around record levels we expect the pace of employment growth to ease somewhat and we should see a pick-up in productivity growth and rising real wages.
“Both of these are required to sustain competitiveness and consumption patterns.”
The report highlights:
Responding to the report, Deputy First Minister John Swinney said: “Today’s State of the Economy report shows almost three years of uninterrupted growth – the longest continuous period of economic expansion Scotland has seen since 2001.
“The most recent figures for this year show all main sectors of the economy recorded growth and our programme of investment in public infrastructure is paying off, helping support a particularly strong performance in the construction sector. The benefits from this investment will underpin future growth in the Scottish economy and is the appropriate response in order to support and grow the economy rather than the UK Government programme of austerity.
“Although Scotland has not been immune to the global economic challenges over the last few years and there is undoubtedly still work to be done, these figures show our economy’s underlying resilience – with positive trends apparent in both employment and investment levels.
“Just last week we also saw youth employment reach highs not seen since 2005 and the lowest youth unemployment level and rate since 2008.
“The Scottish Government remains committed to building a fairer, more sustainable, and more resilient economy, translating into real opportunities for business and added security for workers and families.”