Scotland business

Scottish economic output rises by 0.6%

Bricklayer Image copyright Thinkstock
Image caption Construction output was up an unusually strong 6.1% in the final quarter of last year

Output from the Scottish economy rose by 0.6% during the final three months of last year, according to Scottish government figures.

The UK as a whole saw the same rate of growth in Gross Domestic Product (GDP) during that quarter.

Construction was up an unusually strong 6.1%, with production up 1% and the dominant service sector flat.

Two-thirds of the increase was explained by the construction sector's boost.

The rest was explained by production, which includes manufacturing.

Output rose by 2.8% between the end of 2013 and the end of 2014, while in the UK, the equivalent figure was up 3.1%.

Comparing the whole of 2014 with 2013, construction was up 13%, production up only 1% and the service sector by 2.3%.

The quarterly output figures were the first to adapt to a new method of measuring growth, which takes account of a wider range of factors including research and development, and illegal drugs and prostitution.

Image copyright Thinkstock
Image caption One-third of the increase in output was explained by production

Analysis of the figures by think-tank Fiscal Affairs Scotland emphasised the strength of construction last year, far faster than previous high-growth years of 7% to 8%.

Last year, while the value of the UK construction sector was up 7.5%, it fell in the final quarter.

The analysis also highlighted the reason for UK GDP growing faster overall was the services sector, which represents three-quarters of the economy. It grew twice as fast at the UK level (3.4%) than in Scotland (1.7%).

The full-year figures also give an opportunity to bring up to date the comparative growth rates between Scotland and the rest of the UK.

Growth rates

Fiscal Affairs Scotland points out that average annual growth since 1998 has been 1.6% in Scotland, and 2.2% in the UK as a whole.

Much of that higher growth rate is linked to a faster-growing population in England. The per capita measure for Scotland is an average of 1.2% per year. The equivalent figure for the UK as a whole (excluding offshore oil and gas) is lower than Scotland's, at 1%.

Since the peak of economic output in 2008, the Scottish economy fell and rose again, to be 2.3% higher, while the UK economy, which hit a deeper trough but has since grown back more strongly, is 5.1% bigger.

Per capita, however, Scottish output is still below the 2008 peak, by 0.7%, while the UK per capita output measure is 1.2% below its previous peak.

John McLaren, of Fiscal Affairs Scotland, said: "Scotland's economy continues to improve in terms of higher output.

"The improvement recorded in the construction sector over the past year has been remarkable but little commented upon.

"However, the relatively sluggish performance of the services sector is a concern.

"In particular, the recent stagnant performance of the business services sector is worrying as, since 2010, it has very much lead the way in terms of the recovery and it continues to do so for the UK as a whole."

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