Construction slump blamed as economic growth slips to 0.1%

Scotland’s fragile economy has fallen behind the UK after GDP here grew by just 0.1 per cent between April and June this year, it has emerged.

This is a marked slowdown from the growth of 0.6 per cent which the economy north of the Border enjoyed in the first three months of this year.

The wider UK economy grew at three times the Scottish rate in the second quarter, with growth of 0.3 per cent.

A slump in Scotland’s construction sector was behind the slowdown after major schemes such as the Queensferry Crossing were completed.

Scottish Secretary David Mundell said: “Scotland’s economy still lags behind that of the rest of the UK, and it is more important than ever that Scotland’s two government’s work together to improve Scotland’s economy.”

The services sector grew by 0.7 per cent in the latest figures, but output in production fell by 0.7 per cent.

Scotland’s economy has struggled since the North Sea downturn following the global oil price crash.

In the final quarter of last year the economy shrank by 0.2 per cent, but the country avoided recession with the booming growth in the early part of this year. But five of the last six quarters have now seen Scottish growth of 0.1 per cent or lower.

Scottish Government economy secretary Keith Brown welcomed the second successive quarter of growth.

He said: “Although this is more modest growth than we would ideally like to see, it is particularly pleasing to see growth over the first half of the year in industries linked to the oil and gas supply chain, whichprovidesmoreevidence that confidence is gradually returning to the sector.

“Additionally we are seeing strength in Scotland’s services sector – which is particularly good news given that it is by far the largest part of the economy in terms of turnover, value added and employment.”

He put the slump in construction down to major building projects having been completed, but pointed to £4 billion of investment in new schemes this financial year.

However, Labour’s economy spokesperson Jackie Baillie said the figures were “anything but good news”.

She said: “They show almost no growth in the Scottish economy, and particularly disappointing figures for the construction industry – which has seen a 3.5 per cent fall.”