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 52.


    Its that attitude that brings people into despite with each other. For some reason you seem to think your tax money goes towards their free prescriptions.Well it doesnt,Scotland gets a budget which is less than the tax its citizens generate and they use some of it for free prescriptions.Thats Scotlands choice and if you are that unhappy about it,go knocking on the door of Westminster!

  • rate this

    Comment number 51.

    "Scottish economy out of recession after third-quarter growth of 0.6%" - Happy days. I'll just go out and put a down payment on that speedboat I've always wanted, then.

  • rate this

    Comment number 50.

    Well done Scotland lets move forward now , forget about the better together lobby like "Washed Out Willie Rennie" can we finance and run our own country? You bet we can!

  • rate this

    Comment number 49.

    @Lin could Scotland ever be a third world country ? To insinuate it is just pure rubbish. Not to insult any of the poorer countries in Africa but do they have oil, plentiful supply of water, plentiful supply of wind and wave, tourism, exports of food and drink ? I think you will find Scotland is in a far different state than current 3rd world countries. Absolute rubbish.

  • rate this

    Comment number 48.

    The fact of the matter is that Scotland contributes more money per head of population to the UK economy than it receives in return. I Love the idea of Scottish independence I truly do, but I worry that the remainder of the UK just could not cope without us and our contribution.

  • rate this

    Comment number 47.

    Lee44 53

    "That’s good news for Scotland, but are we English tax payers still paying them 14 Billion pounds each year?"


  • rate this

    Comment number 46.

    So the SNP fan boys are all congratulating the SNP for achieving a 0.6% growth in the 3rd quarter of last year. So are these same people also congratulating the UK government for achieving growth of 0.9% in the same period? Probably not. The SNP will never let the facts stand in the way of a good dig at the UK government. The only thing the SNP are good at is blaming someone else for everything.

  • rate this

    Comment number 45.

    @30 What nonsense. Don't blame the Scots for Westminster's ill-conceived spending plans. The Scottish government is correctly prioritising its spending to ensure the most beneficial services are given the money they need: education, NHS, and a council tax freeze - the things which will really help the ordinary member of society get through these difficult times.

  • Comment number 44.

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

  • rate this

    Comment number 43.

    Good news here.
    To all you Anti Scot’s, please note that many English rely on the work generated in Scotland.

  • rate this

    Comment number 42.

    Just think how much better it would be if so much of Scotland's business and investment were not on hold due to the uncertainty inspired by Salmond's doomed referendum.

  • rate this

    Comment number 41.

    So why can they do it and we can't ?
    Do they pay for University education?
    Do they pay for care for the old?
    Must I go on where does all the money go?

  • rate this

    Comment number 40.

    Easy to do it on other people's money, I suppose.

    Without England propping them up, they would be a third world country.

  • rate this

    Comment number 39.

    Perhaps the people who look after the Scottish economy could provide old Georgie Boy with some lessons on how it should be done.

    At least there is some good economical news for once!

  • rate this

    Comment number 38.

    I've lived in many parts of the world and nowhere and noone is so condescending to any other nation, never mind the Scots, than the English. Had the QT comment been made by a Scot there would have been hell almighty. Having a broader mind than many I just laugh it off - the only real laughing stocks are those who talk about others in this way.
    Unfortunate - most English are the same as us!

  • rate this

    Comment number 37.

    Drought, Floods and triple dip recession on the horizon. No wonder people are moving north of the border.

  • Comment number 36.

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

  • Comment number 35.

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

  • rate this

    Comment number 34.


    I think you'll find an awful lot of us just south of the border will be looking at secession from the insane south shortly after you guys free yourselves.

  • rate this

    Comment number 33.

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

    The Scottish Government makes spending decisions on a limited budget.

    Don't blame us for your useless Westminster troughers. If you bothered to vote them out and get decent people to represent you, then just maybe better spending decisions would be made.


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