Scotland follows UK back into double-dip recession

18 Jul 12
The Scottish economy has sunk back into recession along with the rest of Britain, according to Scottish growth figures published today.

By Keith Aitken in Edinburgh | 18 July 2012

The Scottish economy has sunk back into recession along with the rest of Britain, according to Scottish growth figures published today.

The figures, which relate to gross domestic product in the first quarter of 2012, show Scottish output down by 0.1%, the same fall as in the last three months of 2011. This conforms with the technical definition of recession as two successive quarters of GDP contraction.

The figures compare favourably with UK falls of 0.3% and 0.2% respectively in those two quarters, though the UK’s year-on-year performance is better. They also came as the monthly employment statistics showed a fourth successive reduction in Scotland’s jobless rate, which now stands at 8%.

First Minister Alex Salmond claimed that the Scottish economy was showing signs of greater resilience than that of the UK as a whole: ‘But it is clear that the UK Government's austerity agenda and the prime minister’s failure to heed calls for direct investment in construction and infrastructure is hampering progress.’

Others took a gloomier view of the figures, which follow grim surveys in recent days from the Scottish retail sector and chambers of commerce, and a prediction from Glasgow University’s Centre for Public Policy for Regions that the impact of spending cuts in Scotland could be even deeper and longer than previously projected.

In a further study based on today’s GDP figures, the CPPR highlights especially poor performances in construction and in public sector output.  The latter sector, which represents nearly a quarter of the Scottish economy, has failed to grow over four years, while UK public sector output has grown in that period by 5%.

Labour’s Scottish Finance spokesman, Ken Macintosh, said the figures added up to grim news: ‘There is no doubt that the UK Government’s austerity politics are failing big, but we need a much more sophisticated response from the Scottish government,’ he said.

His Tory counterpart, Gavin Brown, attributed falling construction output to SNP ministers ‘slashing the housing budget’.

Andy Willox of the Federation of Small Businesses urged the Scottish government to ‘shelve the distractions and focus on growth’. Scottish TUC leader Grahame Smith said the jobs figures masked under-employment and part-time working and warned that Scotland could emerge from recession with a ‘part-time, low wage, insecure’ labour market.

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