Scotland business

Construction boosts Scots economy

house building
Image caption Construction was the best performing sector with growth of 10.4%

Scotland's economy grew by 1.3% in the second quarter of this year according to official figures.

That is the biggest increase since the spring of 2006 and is a higher rate than the UK as a whole which grew by 1.2% in the same period.

The best performing sector was construction which rose by 10.4% while services grew by just 0.3%.

However revised figures for the first quarter of this year show that the Scottish economy contracted by 0.2%.

Over the year to the end of June 2010 GDP fell by 1.7%.

During that period, the service, production and construction services all recorded downward trends.

Commenting on the latest statistics, Finance Secretary John Swinney said it showed the Scottish government was right to bring forward capital projects.

He said: "After a shorter and shallower recession than the UK as a whole, today's second quarter Scottish growth rate - the highest since the second quarter of 2006 - is a strong sign of recovery, built in Scotland and led largely by the construction sector and our capital spending programme."

He added: "We cannot have Scotland's recovery choked off by irresponsible cuts from Westminster."

CBI Scotland's assistant director, David Lonsdale, said: "The competitiveness of and prospects for Scots firms are greatly strengthened when government keeps a tight lid on those costs under its control that affect business, and when it focuses its scarce resources on those areas which most galvanise growth, namely capital investment in infrastructure and support for skills, exports and innovation."

The Scottish Chambers of Commerce welcomed the GDP figure as a "shot in the arm" for the Scottish economy.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: "There remains widespread apprehension over the effects of the public spending cuts in the coming months and years, but these results prove that the Scottish economy has an underlying strength and resilience that ought to stand us in good stead for the challenges ahead."

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