Scottish economy grows by 0.8% in first quarter of 2017

Written by Liam Kirkaldy on 5 July 2017 in News

Despite recession fears the figures show the economy rebounded from negative growth in the previous quarter

Image credit: PA

The Scottish economy grew by 0.8 per cent in the first quarter of 2017, with expansion in the manufacturing sector and increased stability in the oil and gas sector leading to the highest quarter of growth since the end of 2014.

The figures mean the economy rebounded from negative growth of 0.2 per cent in the previous quarter to grow faster than the UK rate of 0.2 per cent.

But the Scottish economy lagged behind the UK on an annual basis, compared to the same period last year, with Scotland seeing 0.7 per cent growth, compared to two per cent across the UK.


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Official figures show services in Scotland grew by 0.3 per cent, production grew by 3.1 per cent, and construction contracted by 0.7 per cent.

Economy Secretary Keith Brown said the statistics “reinforce the fact that the fundamentals of Scotland’s economy are strong”.

He said: “Scotland’s output is now six per cent above the pre-recession level and unemployment is at its lowest ever level.

“Since late 2014 our growth rate has been impacted significantly by the fortunes of the North Sea with around two thirds of the slowdown in 2016 attributed to the onshore impact of lower oil prices.

“Today’s figures show a rise in output in industries linked to the North Sea for the first time since 2014. While there is no room for complacency, these figures - alongside a number of recent business surveys - indicate that there is growing confidence in the sector.

Brown added: “The Scottish Government will continue to use all of the powers at our disposal, including our £6.5bn infrastructure plan and our new £500m Scottish Growth Scheme which opened for bids last month. We will also continue to invest in the doubling of free childcare and offer support for key industries including oil and gas, manufacturing, tourism and new technologies.”

The figures follow concerns over the Scottish economy’s performance, with the Fraser of Allander Institute recently warning it appeared to be "stuck in a cycle of weak growth”.

Scottish Labour’s economy spokesperson Jackie Baillie described the news as “a narrow escape for our fragile economy”.

She said: “The long-term trend paints a worrying picture of Scotland’s economic performance, with the average annual change of just 0.5 per cent – a quarter of the UK-wide growth.

“The rise in output from industries linked to the North Sea is very encouraging, but recent history should have taught the SNP the danger of relying solely on this sector.

“Far from a vote of confidence in the economy, as Economy Secretary Keith Brown has claimed, Scotland is not out of the woods yet and SNP ministers need to redouble their efforts.

“They need to end their obsession with independence and focus on the day job of boosting jobs and productivity and supporting business.”

Lib Dem leader Willie Rennie said: “Scotland has had a brush with recession. The big picture is of an erratic and patchy economy.  One quarter down followed by one quarter up is clear evidence.

“The long term route out of this is significant investment in education and skills. Scottish Liberal Democrats will continue to champion this. It is the way to establish a high-wage, high-skill economy.”

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