Scottish economy 'grew throughout 2017'

Scottish bank notes
Image caption Scotland's economy grew in all four quarters of 2017

Scotland's economy grew by 0.3% during the final three months of 2017, official figures have shown.

After four quarters of positive growth, Scottish gross domestic product (GDP) was up 1.1% by the end of the year compared to the same point in 2016.

Equivalent UK growth was 1.4% over the same period, and 0.4% for the quarter.

Scottish ministers welcomed "strong" performance, but the UK government said the gap between Scotland and the UK as a whole was "increasingly concerning".

The Scottish government figures showed that annual GDP growth - the measurement of the four quarters of 2017 against the four which came before, comprising 2016 - was 0.8% for Scotland, and 1.8% for the UK as a whole.

However it also highlighted a 1.1% increase in GDP between the final quarters of the two years - so for the period spanning 2017.

Construction concerns

In the final three months of 2017, output in Scotland's production sector grew by 0.9%, while the services sector was up by 0.5%.

However, the outlook was more difficult for the construction sector, which fell by 2.6% - its eighth consecutive quarter of decline.

Dr Stuart McIntyre of the Fraser of Allander Institute, an economic think-tank at the University of Strathclyde, said the construction figures were "largely responsible for dragging headline growth down".

He said "weak" overall growth in the Scottish economy "remains a significant concern", but added that there was encouraging performance in sectors including accommodation and food, electricity and gas and chemicals and pharmaceuticals.

Image caption Nicola Sturgeon said economic growth was strengthening

First Minister Nicola Sturgeon, visiting an industrial power firm in Dumbarton, said her government was working to support businesses despite "Brexit headwinds".

She said: "This is the fourth consecutive quarter of positive economic growth in Scotland and we are seeing growth his year that is stronger than the growth in our economy last year.

"Its important that we continue to support businesses and companies across Scotland to see that growth accelerate - that's why we're investing in research and development, its why we've set out plans to establish a National Investment Bank, investing in manufacturing and supporting the economy in every way.

"Of course one of the biggest challenges Scotland and the UK faces over the next few years is Brexit, which is why its so in the interests of our economy to see Scotland remaining in the single market."

'Significant gap'

Scottish Secretary David Mundell welcomed the continued growth, but voiced fears over the "significant gap" with growth in the rest of the UK - pointing in particular to tax changes which came into force this month.

He said: "It is good news that today's GDP figures show that Scotland's economy continues to grow. I note a modest improvement in Scotland's important services sector, and encouraging growth in production industries.

"However, it is increasingly concerning that a significant gap persists between Scotland's economy and the rest of the UK. The Scottish government has the powers to boost productivity and strengthen the economy, and must use them to close this gap."

Andy Willox, Scottish policy convener for the Federation of Small Businesses, said the figures were "reasonable" but called on both governments to do more.

He said: "If we want to move the Scottish economy up a gear, we need both the UK and Scottish governments to put growth at the heart of their priorities. For a start, they could examine whether their colossal procurement budgets are delivering for local smaller firms."

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