Scottish economy grows 0.2 per cent in Q1

Latest GDP data published today shows Scotland’s GDP grew by 0.2 per cent in the first quarter of the year, compared to the 0.1 per cent growth for the UK as a whole.

The services sector expanded by 0.4 per cent, with a pick-up in growth in transport, information and communication services, and professional, scientific, administrative and support services. The production sector continued its positive growth into 2018, achieving quarterly growth of 0.9 per cent in Q1 2018, the same rate as in Q4 2017.

Construction output fell in the first quarter, due in part to the adverse weather seen during February and March during the ‘Beast from the East’.

Responding to the GDP figures Finance, Economy and Fair Work Secretary Derek Mackay said: “Scotland’s economy is strong, with output per head the highest in the UK outside London and the south-east. We are also one of the top destinations for inward investment, while Scottish productivity has grown faster than the UK’s over the past decade.

“Despite the impact of the ‘Beast from the East’ our economy continued to grow in the first quarter of 2018 making this the fifth consecutive quarter of growth.

“We are seeing growth in a number of sectors from services to scientific, and production to professional services. It is also encouraging to see last year’s pick up in the production industries, linked to improved sentiment in the oil and gas sector, continue into the start of this year.

“We are supporting the economy with the most competitive business rates package in the UK, increased investment in enterprise and skills and the delivery of the National Manufacturing Institute and Scottish National Investment Bank.

“Our prospects for longer-term growth are threatened by Brexit and the prospect of being taken out of a market around eight times bigger than the UK’s market alone. That is what poses the most serious risk to jobs, investment, prosperity and living standards.”

Liz Cameron OBE, director & chief executive of Scottish Chambers of Commerce, said: “It is positive to see that Scotland’s GDP edged above the UK as a whole in the first quarter of 2018, leading to the fifth consecutive quarter of growth for the Scottish economy. However, these statistics continue to highlight key issues in Scotland’s economy, particularly in the construction sector which has now contracted for nine successive quarters. The fall in Q1 was particularly pronounced for the sector, with the ‘Beast from the East’ impacting activity.

“Despite this fall in construction output, there was positivity in key sectors such as Manufacturing and Business Service and Finance, which respectively provided the highest contributions to growth.

“We expect the recently refreshed Scottish Cabinet and Ministerial team to bring a renewed vigour to Scotland’s approach to the economic challenges that we face. Combined portfolios linking Transport, Infrastructure and Connectivity should, in theory, provide a more holistic economic approach. A key priority should be the accelerated regeneration and renewal of Scotland’s infrastructure, which should act to bolster our domestic construction sector.”

The body representing small businesses, FSB, said growing business confidence could help “get the economy moving”.

FSB external affairs manager for Scotland Stuart Mackinnon said: “These figures show the Scottish economy growing slowly in the first three months of the year, though slightly faster than the UK as a whole.

“With new figures out today showing growing business confidence, it is up to policymakers to nurture this newfound optimism to get the economy moving.

“That means securing a Brexit deal that works for small firms and tackling domestic problems like late payment and poor digital infrastructure.”