Scottish economy 'still growing slowly'

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Image caption Production - including manufacturing, energy and mining - accounts for nearly a fifth of the Scottish economy

The Scottish economy grew by 0.2% in the third quarter of 2016, according to Scottish government statistics.

The previous three months was found to have the same rate of growth, following a downward revision of previously-published figures.

That brings the Scottish growth rate for the year to September to only 0.7% higher than the previous four quarters.

During the same period, the UK economy grew at a more typical rate of 2.2%, the figures showed.

Growth in the service sector has been slow but steady over recent quarters. It includes retail, property, finance and the public sector. It represents three-quarters of the economy, and it grew 0.4%.

Production - including manufacturing, energy and mining - accounts for nearly a fifth of the Scottish economy. In the third quarter of 2016, it contracted by 0.1%.

The construction sector saw rapid growth in 2014 and 2015, according to these figures, but during last year, it contracted significantly. The fall in output from that sector was 1.4% on the previous quarter, and 5.8% on the previous year.

The other sector, of agriculture, forestry and fishing, grew output by 0.5% over April to June, and by 1.4% over the third quarter of 2015.

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Responding to the chief statistician's publication, Scottish Economy Secretary Keith Brown said: "Output in the construction sector is still 13% higher than it was in Q3 2014, leaving us in a relatively strong position, and the Scottish government has set out a programme of investment in infrastructure, including fast-tracking £100m of public spending to continue to support the sector.

"There is no doubt that businesses have faced increased economic uncertainty in the months following the EU referendum result, and Scotland is not immune to these risks."

He said the Scottish government is responding with its plans to retain the economy's place within the European single market, and investment through the Scottish Growth Fund.

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: "It is very disappointing that Scotland's economic growth slowed in the third quarter of 2016 and continues to trail the UK as a whole, where growth remained steady during the same period.

"Scottish government actions must be aimed squarely at increasing this rate of growth and utilising the powers at its disposal to support businesses, giving them the edge over businesses in other parts of the UK and enabling them to grow.

"As the Scottish Parliament prepares to debate the Scottish government's draft budget for the year ahead, we would ask our politicians to consider carefully whether each measure proposed will make it easier for businesses to succeed, or make it more difficult.

"Scotland has more devolved economic powers than ever and they must be used effectively to deliver the business growth we so badly need."

'Poor performance'

Speaking for the Federation of Small Businesses in Scotland, Andy Willox said: "Scottish smaller business confidence was on the slide throughout 2016, so today's mediocre economic statistics are unwelcome if not surprising.

"2017 must be the year when we get Scotland's economy moving again. New and growing firms can help to deliver this gear shift.

"We're looking for governments in Edinburgh and London to think about the impact on local economies of every decision they make. When Scottish firms are reassured that their interests are at the top of the agenda, we're sure that they'll help to deliver the jobs and growth the country needs."

At the Fraser of Allander Institute in Strathclyde University, director Professor Graeme Roy said the GDP and employment figures for September to November "emphasise just how poor Scotland's recent economic performance has been".

He added: "While some may try to infer something about the economic consequences of the Brexit vote, we would urge caution.

"While these are the first data we have about the overall performance of the Scottish economy since the vote on 23 June, Scotland's economic challenges and under-performance predate that vote."

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