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Wednesday, 20 July 2016

Scottish Economic Growth Stalls in 2016

20/07/2016 - There was no growth in the Scottish economy in the first three months of this year, according to official figures.

Contractions in the construction and production industries were balanced out by a growth in services.
UK GDP grew by 0.4% over the same period.

Scottish GDP per person - which takes population changes into account - was also flat during the first quarter of 2016.

During the first three months of the year services in Scotland grew by 0.4%, while production contracted by 1.2% and construction by 1.5%.

On an annual basis, Scotland's economy grew by 0.6%, compared with UK growth of 2%.

The figures were compiled by Scotland's chief statistician.

The GDP figures were released on the same day as official data showed thatunemployment in Scotland fell by 18,000 between March and May.
A leading economic forecaster described the two sets of figures as "a mixed bag" for the Scottish economy.

Graeme Roy, director of the Fraser of Allander Institute at the University of Strathclyde, said growth had been "stagnant" over the first three months of the year.
"While the all-important services sectors grew, there was a sharp fall in production and construction," he said.

"Of greatest concern was the fall in manufacturing, which was down 2.6% over the three months and 5.4% over the year. This was the sharpest fall in annual manufacturing output since the 2008/09 financial crisis.

"On the plus side, revisions to the data paint a rosier picture of growth last year. The Scottish economy is now estimated to have grown in each and every quarter of 2015, with growth of 1.4% in 2015 up from the previous estimate of just +0.9%.

"Despite that, Scotland continued to lag behind the UK as a whole."

'Concerted response'

Responding to the GDP figures, the Scottish Chambers of Commerce called for "a concerted government response to Scotland's growth problems and swift clarification of the position of EU nationals working in the UK".

Chief executive Liz Cameron said: "Scotland's growth has now been at a fraction of that of the UK as a whole for a full year and there are few signs of a major improvement in sight.

"In the light of the EU referendum result, the Scottish and UK governments must take all steps necessary to support businesses at this time and help them to invest for the future and get our economy back on the path of growth."

The Federation of Small Businesses said the growth figures presented a challenge.
Scottish policy convener Andy Willox said: "These pre-referendum figures demonstrate that the Scottish economy was underperforming before the vote.

"Business surveys and feedback suggest that some investment plans and deals have been put on hold as a consequence of recent economic and political turbulence.

"As Number 10 and Bute House draw up plans to restore business confidence, they must think about community firms as well as the stock market.

"They must shelve proposals that would give business owners headaches and think about local infrastructure as well as large national projects."
In a report released last week, accountancy firm PwC downgraded its growth forecasts for Scotland's economy.

It suggested house prices were set to fall north of the border amid an economic slowdown - but a recession would be avoided.

ENDS
Source: BBC

The full statistical publication can be read here: http://www.gov.scot/Topics/Statistics/Browse/Economy/PubGDP/GDP2016Q1

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