Scottish economy out of recession after third-quarter growth of 0.6%


The Scottish economy comes out of recession as new figures from the Scottish government show it grew by 0.6% in July to September

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The Scottish economy moved out of recession between July and September, growing by 0.6%, according to official figures.

On an annual basis, Scottish Gross Domestic Product (GDP) grew 0.4%.

The Scottish government said output in the services industries grew by 0.3%, but output in construction contracted by 0.4% during 2012's third quarter.

During the same period, the whole UK economy grew by 0.9%, helped by spending on the Olympics.

That has been followed by a first estimate of GDP for October to December 2012 that indicated the UK economy contracted by 0.3%, threatening a triple dip recession

Underlying the headline figures, the strongest growth in July to September was in manufacturing, up by 3%, while electricity and gas production rose 1.9%.

A fall in electricity generation had been one reason for poorer figures in the second quarter of the year.

Tourism did not perform as badly as feared last summer and, included in the figures for the "distribution, hotels and catering" sector, it grew by 1.1%.

Deeper contraction

The shape of the downturn in Scotland has changed quite a bit. There's a return to growth after recession and it's stronger than expected.

Overseas visitor numbers, down by 2012, suggested that the Olympic bounce not only failed to reach Scotland but was bad news for tourism. However, the GDP figures don't make things look so bad for the hospitality sector.

The recession of last winter has changed shape too. It's shorter than previously thought, starting in January of last year rather than October 2011. And it was deeper in the first quarter of last year than we were previously told, with the second quarter less deep.

With an upgrade of the methodology behind these figures, the period going into the downturn also looks different now. The end of the boom years, from early 2007 until the peak of output in mid-2008, had a total rise in growth of 1.4%, lower than the previous reckoning of 1.8%.

And, as the economy tipped into recession, it fell by slightly less than we were previously led to believe, down by 5.6%.

We're still some distance from making up that lost ground and, despite good news with the most recent figures, the course of the economy over the end of last year and the start of this one is still looking bumpy.

The large business services and finance sector grew by 0.9%, but there were falls in transport, storage and communication - down by 1.5%.

These latest figures also show revisions to estimates for previous quarters, indicating that the recession of last winter was shorter than previously thought.

There was a small amount of growth in the final quarter of 2011, up by 0.1%, whereas it had been thought to decline by 0.4%.

That was followed by a deeper contraction in the first three months of 2012 than initially reported, down by 0.5% compared with the previous estimate of 0.2%.

From April to June 2012, output fell by 0.1%, whereas it was previously thought to have had a deeper decline of 0.4%.

Finance Secretary John Swinney said: "These figures show that the Scottish economy has returned to growth after two quarters of contraction.

"However, there is no room for complacency. Recovery remains fragile and the UK government's continuing inaction risks a return to recession for the third time since the financial crisis of 2008.

"In contrast, the Scottish government will continue to do all it can to strengthen economic growth and create jobs. Next week, we will conclude our negotiations with parties across parliament to deliver a budget for jobs and growth.

"Our budget prioritises construction, skills, employment and a green economic stimulus."

Liz Cameron, chief executive of Scottish Chambers of Commerce, thought another difficult year was in store despite the third quarter growth.

'Treading water'

"With our own Scottish Chambers of Commerce Quarterly Business Survey projecting only a marginal improvement in output and confidence in the early part of 2013, these latest figures underline the picture of an economy that has been treading water for an extended period of time," she said.

Scottish Building Federation Executive Director Michael Levack thinks that the latest figures "paint an overly optimistic picture of the construction sector's performance in the course of last year".

"Figures for the Scottish construction industry published back in December show industry output declined by 12% over the year to September 2012, a reduction of £1.3 billion in the annual value of the industry to the Scottish economy," he said.

Scottish Liberal Democrat leader Willie Rennie suggested the SNP administration could be doing more to boost the economy.

"The growth figures for Scotland are welcome, even if they are still behind the rest of the UK," he said.

"The message to the Scottish government is that it cannot afford to dither any further on getting capital investment projects up and running.

"They fell short by £300m this year with their Futures Trust and have declined to start identifying projects in 2014 to use the extra capital resources provided by the UK government."

Scottish Secretary Michael Moore added: "Today's positive GDP figures are good news and very encouraging for Scotland's families and firms."

Scotland's third-quarter growth of 0.6% was better than the UK economy as a whole, which only grew by 0.1% over the year.

That return to growth during the third quarter of 2012 also outstripped the performance in the same period the previous year, when the economy grew by 0.4%.


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  • rate this

    Comment number 32.

    What the English think of Scots.
    Quote from audience member BBC QT Lanacaster, "Why don't we (England) just send all the nuclear waste to the Scots then give them independence"

    they'd cut off their noses to spite their face, create a hostile (due to waste dumping) foreign power on your doorstep & in the process give them all the material they need to make "dirty nuclear" bombs

  • rate this

    Comment number 31.


    The important thing here - why was this comment made & so well received?

    Because the English as a whole cannot accept that we are no more than A N Other poxy country these days.

    We want to retain Britain to prove us important still, & leave the EU for the same reason.

    Talk of leaving the Union means we have to face the reality that we realy aren't very important anymore.

  • rate this

    Comment number 30.

    Which reminds me, I need a repeat prescription - which I have to pay for while also subsidising those north of the border.

  • rate this

    Comment number 29.

    Oh please, can we stop using this thread to have a pop at the Scottish people and Scotland. I am English and have have holidayed more than once in Scotland and experienced nothing but kindness and warmth from its people and found the country breathtaking. If Scotland has moved out of recession then that is great news and I am pleased for them.

  • rate this

    Comment number 28.

    27. John Fish
    Probably the only truly left of centre government representing the people and the country that Britain has ever had.
    Maybe... if you're completely unaware of Clement Atlee's post war Labour govt. Where do you think the welfare state and the NHS came from?

  • rate this

    Comment number 27.

    Probably the only truly left of centre government representing the people and the country that Britain has ever had.

  • rate this

    Comment number 26.

    Chill out folks. Have a watch and enjoy your day
    16 Minutes ago

  • rate this

    Comment number 25.

    This figure does not count for a hill of beans, other than the Oil business and imported Wind turbines Scotland is a wasteland poretending to be a Tourist Country. All this maddness about Independance, what a waste, I voted SMP to get rid of the Labour Party and this was successful. The Scotish Government is like a County Council, I am British and still will be after 2014 and still be a Scotsman.

  • Comment number 24.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 23.

    15. minuend
    What the English think of Scots.
    Quote from audience member BBC Question Time from Lanacaster etc.

    Speaking as a Scot. for years many Scots have insulted the English & blamed them for all their (usually self inflicted) ills. After years of just shrugging it off the English have started giving it back and the Scots can't handle it. They can dish out but can't take it!

  • rate this

    Comment number 22.

    @15 The BBC loves such ant-scottish remarks. BBC Reporting Scotland is no better. The BBC think that Scots and Welsh are fair game. Remember the Anne Rbinson scandal when the Police were called in they should be called in again for the Question Time comments. Suggesting that England should dump its nuclear waste in Scotland and then give us independence is pure racism. Vote YES in 2014.

  • rate this

    Comment number 21.

    Great to be able to comment on a Scottish business and politics item - or is it a UK item?

    Well done to the SNP government for what they've been able to achieve with limited powers. Independence can only be good for Scotland as we'll then have all the powers we need.

    Vote YES in 2014.

  • rate this

    Comment number 20.

    What the English think of Scots.

    Quote from audience member BBC Question Time in Lanacaster, "Why don't we (England) just send all the nuclear waste to the Scots then give them independence"

    This remark brought the biggest cheers and applause of the whole night from the audience . Why does the BBC allow such comments to be broadcast?

  • rate this

    Comment number 19.

    This video highlights how the english are holding back Scotland

  • rate this

    Comment number 18.

    Roll on the vote

    There's One Tory MP in this country, and he's running the place
    How daft is that??

    We've got more Pandas than Tory MPs in Scotland

  • rate this

    Comment number 17.

    A political elite bereft of ideas. Does quarterly economic growth really make a difference to one of the most socially divided societies in Europe. Be interesting to see the Nats plans for the "Norwegian" style economy we're going to be given after the referendum. Everyone will be a miilionaire.

  • rate this

    Comment number 16.

    Well done to the SNP and John Swinney for their excellent management of Scotland's economy. Vote YES to Scottish independence in 2014 and lets stop subsidising England.

  • rate this

    Comment number 15.

    What the English think of Scots.

    Quote from audience member BBC Question Time from Lanacaster, "Why don't we (England) just send all the nuclear waste to the Scots then give them independence"

    This remark brought the biggest cheers and applause from the audience of the whole night. Why does the BBC allow such comments to be broadcasted?

  • rate this

    Comment number 14.

    Somebody must have bought a deep fried kebab and a bottle of Buckie.

  • rate this

    Comment number 13.

    The reason why the scottish is out of the recession is because everyone else is buying scotch whiskey to drown their sorrows due to being made redundant due to the cuts imposed by the recession


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