Economic figures: Scottish GDP contracts

Scotland’s gross domestic product (GDP) contracted by 0.3 per cent in real terms during the second quarter of 2019.

The UK as a whole experienced an economic contraction of 0.2 per cent during the same period.

The drop follows growth of 0.6 per cent during the first quarter of the year.

National Statistics noted that the largest single contribution to the drop came from the manufacturing sector, with the biggest falls occurring in sectors which showed large increases in the previous quarter.

The first three months of the year preceded the original planned date of Brexit and growth then was probably due to stockpiles being built or work being brought forward ahead of that date. 

The finance minister Derek Mackay said: “Given the repeated warnings from business organisations and the contraction across the UK in the same quarter, it is unsurprising, but deeply frustrating that we are now seeing the Brexit impact on the Scottish economy. The responsibility for this contraction lies entirely with the UK Government.”

The leader of the Scottish Liberal Democrats Willie Rennie also blamed Brexit, saying: “The impact of Brexit is hitting investment, jobs and living standards, and the main phase hasn’t even happened yet.

“That is why the Lib Dems are right to offer people a way to make it stop, with our revoke policy.”

But the Scottish Conservatives’ economy spokesman Dean Lockhart accused the SNP of “running for cover” by blaming Brexit. He said: “In true SNP style, whenever things look bad Derek Mackay reaches for the Brexit crutch.

“When Scotland’s economy grew just three months before, all the SNP cared about was trumpeting its own record.

“That’s a cowardly way to govern. Scotland’s economy has continually struggled in comparison to the rest of the UK, year after year.

 “The reality is that the economy in the rest of the UK, also subject to Brexit uncertainty, has been growing at almost twice the rate of Scotland under the SNP.”

The figures show that Scotland's GDP has grown by 0.7 per cent, compared to the same quarter last year. The equivalent UK growth over the same period was 1.2 per cent.

Andrew McRae, the Federation of Small Businesses’ (FSB) Scotland policy chair, called the figures “disheartening if unsurprising”. He said: “Across the country, firms are either pouring resources into Brexit planning or postponing critical decisions until our political leaders get their act together.”

The priority of small businesses was to avoid a no-deal Brexit.

He added: “The upcoming Scottish Government budget must focus on providing much needed stability and at every turn ministers need to think twice about putting additional burdens on local firms.”