Scottish economic growth slows sharply, against backdrop of UK deceleration

SCOTTISH economic growth is estimated to have slowed to 0.8 per cent in the third quarter – from 5.6% in the preceding three months when easing of coronavirus-related restrictions provided a major boost – based on official monthly figures published yesterday.

Growth in the UK as a whole has also slowed sharply, from 5.5% in the April to June period to 1.3% in the third quarter, data from the Office for National Statistics showed earlier this month.

Scottish gross domestic product in the July to September period is estimated to have been 2.1% below its level in the final three months of 2019, the last full quarter before the pandemic hit.

Overall UK GDP in the third quarter was also 2.1% adrift of its level in the final three months of 2019, a shortfall which Pantheon Macroeconomics chief UK economist Samuel Tombs said this month had seen the economy reclaim “laggard” status among the Group of Seven leading industrialised nations.

GDP north of the Border rose

0.4% month-on-month in September, according to the Scottish Government data published yesterday. UK GDP grew 0.6% in September, the ONS figures showed. Scottish GDP in September was 1.1% adrift of its pre-pandemic, February 2020 level. UK GDP in September trailed its February 2020 level by 0.6%. The Scottish figures cover the onshore economy, and exclude offshore oil and gas extraction.

Scottish services sector output grew 0.5% month-on-month in September, the latest figures show. Construction output rose 1.9%. However, production output in Scotland fell 0.9% in September, even though the manufacturing sub-sector grew 0.3%.

The largest negative contribution to growth in September was a 4.7% fall in electricity and gas supply, the Scottish Government noted, adding: “This has swung between large positive and negative contributions over recent months due to volatility between different modes of electricity generation and maintenance at major power stations.”

The rise in Scottish manufacturing output in September was the first increase since June. The Scottish Government said: “Manufacturing output has fallen back in recent months across a broad range of sub-sectors after growing strongly to above pre-pandemic levels during the first half of the year.”

September manufacturing output was 0.7% adrift of its February 2020 level.