Scottish economy grows by 0.2 per cent

The latest Gross Domestic Product release, covering the period July to September 2016, shows that total output in the economy grew by 0.2 per cent compared to the previous three months. On an annual basis, compared to the third quarter of 2015, Scottish GDP grew by 0.7 per cent.

The services sector, which accounts for three quarters of the economy, grew by 0.4 per cent during the latest period, the production sector contracted by 0.1 per cent, and construction output contracted by 1.4 per cent.

Industries which represent a large proportion of the economy or which have big quarterly changes have the most impact on overall GDP.

Services accounted for 0.3 percentage points of growth in the Scottish economy in quarter 3 2016.

Construction accounted for 0.1 percentage points of contraction in the Scottish economy in quarter 3 2016.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: “It is very disappointing that Scotland’s economic growth slowed in the third quarter of 2016 and continues to trail the UK as a whole, where growth remained steady during the same period. Over the year as whole, Scotland’s growth has been 0.7%, compared to a far healthier UK rate of 2.2%. Scottish Government actions must be aimed squarely at increasing this rate of growth and utilising the powers at its disposal to support businesses, giving them the edge over businesses in other parts of the UK and enabling them to grow. As the Scottish Parliament prepares to debate the Scottish Government’s Draft Budget for the year ahead, we would ask our politicians to consider carefully whether each measure proposed will make it easier for businesses to succeed, or make it more difficult. Scotland has more devolved economic powers than ever and they must be used effectively to deliver the business growth we so badly need.”

Andy Willox, of the Federation of Small Businesses in Scotland, said: “Scottish smaller business confidence was on the slide throughout 2016, so today’s mediocre economic statistics are unwelcome if not surprising.

“2017 must be the year when we get Scotland’s economy moving again. New and growing firms can help to deliver this gear shift.

“We’re looking for governments in Edinburgh and London to think about the impact on local economies of every decision they make. When Scottish firms are reassured that their interests are at the top of the agenda, we’re sure that they’ll help to deliver the jobs and growth the country needs.”

Professor Graeme Roy, director of the Fraser of Allander Institute at Strathclyde University, said the GDP and employment figures for September to November “emphasise just how poor Scotland’s recent economic performance has been”.

He added: “While some may try to infer something about the economic consequences of the Brexit vote, we would urge caution.

“While these are the first data we have about the overall performance of the Scottish economy since the vote on 23 June, Scotland’s economic challenges and under-performance predate that vote.”