Scottish economy grows 0.1 per cent in Q2

The latest Gross Domestic Product release, covering the period April to June 2017, shows the economy grew by 0.1 per cent in real terms compared to the previous three months.

On an annual basis, compared to the second quarter of 2016, the Scottish economy grew by 0.5 per cent, this was behind the equivalent UK growth of 1.5 per cent.

During the second quarter of 2017 output in the Services sector grew by 0.7 per cent, output in Production fell by 0.7 per cent and output in the Construction sector fell by 3.5 per cent.

Prof Graeme Roy, director of the Fraser of Allander Institute at the University of Strathclyde, said the figures continued to show how “fragile” growth in the Scottish economy was at the moment.

He said growth had been 0.1% or lower in five of the past six quarters.

Prof Roy said: “The one significant bright spot was the strength of Scotland’s services sector which grew +0.7% over the quarter with financial and business services growing strongly both over the quarter and the year.

“Construction continued to decline - for the sixth consecutive quarter - whilst manufacturing also slipped back a little.”

Secretary of State for Scotland David Mundell said: “The GDP figures show the Scottish economy growing, but at a far slower rate that we would like to see. Scotland’s economy still lags behind that of the rest of the UK, and it is more important than ever that Scotland’s two government’s work together to improve Scotland’s economy. The UK Government is investing in Scotland, through support to our oil and gas industry, UK City Deals and our ambitious Industrial Strategy. Now the Scottish Government needs to use the considerable levers they have to increase Scotland’s prosperity.”

Andy Willox, Federation of Small Business’s Scottish policy convenor, said: “No-one with a stake in the success of Scotland’s economy – and that’s all of us – should be pleased with today’s lacklustre economic figures.

“Business confidence in Scotland, and across the UK, fell sharply in the third quarter of this year, with firms pointing to spiralling overheads and political uncertainty associated with Brexit. Therefore it is perhaps unsurprising we’re also seeing the wider economy performing poorly.

“To charge growth, Ministers in Edinburgh and London must ensure all of their plans are geared towards boosting local economies. We’ve made the case to the UK Government for a Brexit-deal that works for the smaller businesses that sustain half of Scotland’s private sector employment. They must deliver.

“In Edinburgh, the Scottish Government must signal their commitment to boosting growth by guaranteeing no new burdens on firms until after the Brexit transitional period.”