Fiona Hyslop

The data has revealed that over the year, compared to the third quarter of 2019, the economy has contracted by 9.5%.

During the third quarter output in the construction sector grew by 52.0%, output in production contracted by 18.6%, and output in the services sector contracted by 13.8%.

Responding to the publication, economy secretary Fiona Hyslop said: “We know that businesses across Scotland have faced considerable challenges this year and we have worked hard to provide critical support at every stage.

“On top of £2.3 billion support announced at the start of the pandemic, we have provided almost £1.2 billion in economic recovery funds and £570 million in our recent packages of business support.

“While we are doing everything in our power to support business, it is incredibly disappointing that the UK Government is creating more uncertainty by refusing to rule out a ‘no deal’ Brexit at the end of the transition period on 31 December.

“This would be the worst of all possible outcomes and would result in the imposition of damaging trade tariffs at a time when we are already focused on tackling a pandemic and a recession.”

Tracy Black, CBI Scotland director, added: “Economic growth bounced back in Q3 2020 following the easing of lockdown measures, but the Scottish economy remained nearly 10% smaller than it was at the end of 2019. With Scotland entering back into a rolling cycle of tiered restrictions in the autumn, we’re likely to see the recovery taking a step back in Q4.

“Hospitality, retail and tourism firms have been amongst the most severely impacted by the pandemic, and the second hit caused by reintensifying restrictions may prove too much for some to bear. While recent employment figures for Scotland were encouraging relative to the rest of the UK, the labour market remains fragile and fear of increased job losses over the winter remains a live concern.

“Additional support from the UK and Scottish governments – most notably the extension of the Job Retention Scheme – has been welcome. The recent good news on vaccines gives hope for the future and may give some stimulus to spending.

“But this time should be used wisely: investing in mass testing, ensuring a seamless test and protect system and an efficient vaccine rollout will be critical to tackling the pandemic. At the same time, businesses want to see a clear strategy for early 2021 and assurances that a return to the same cycle of stringent restrictions is unlikely.”