Belfast Telegraph

Economic growth staves off fears of dip into recession

The Scottish economy grew in the first three months of the year, staving off fears of a recession.

Official statistics show gross domestic product (GDP) between January and March grew by 0.8% compared to the previous three months and was up 0.7% compared to the same period last year.

UK quarterly growth was 0.2% in the first three months of 2017 and 2% year-on-year.

Over the period, output in the Scottish services industry was up by 0.3% and production grew by 3.1%, but the construction sector contracted by 0.7%.

Economic experts had warned last week it was ''in the balance'' whether or not Scotland formally goes into recession.

Economy Secretary Keith Brown said the latest figures were "a welcome vote of confidence in our economy".

He said: "Since late 2014, our growth rate has been impacted significantly by the fortunes of the North Sea, with around two-thirds of the slowdown in 2016 attributed to the onshore impact of lower oil prices.

"Today's figures show a rise in output in industries linked to the North Sea for the first time since 2014.

"While there is no room for complacency, these figures - alongside a number of recent business surveys - indicate that there is growing confidence in the sector.

"Manufacturing output is also up, in part due to the resumption of steel production at the Dalzell plant after the Scottish Government intervened to save this key strategic asset.

"The reopening of Dalzell is just one of the actions the Scottish Government is taking to boost manufacturing - we are also supporting for expansion of the aluminium smelter at Lochaber and the development of a new manufacturing centre in Renfrewshire.

"While today's figures are positive, we will continue to do everything possible to support the performance of Scotland's economy, particularly as Brexit uncertainty continues to cast a shadow over the future economic outlook."

Scottish Secretary David Mundell said the figures were " very encouraging".

He said: "The Scottish economy is returning to growth and I am pleased to see that the manufacturing sector in particular is making the most of export opportunities.

"But, over the year, Scotland has continued to lag behind the UK as a whole - so there is still a lot of work to do.

"The Scottish Government has extensive powers at their disposal to grow and support the economy, and these figures underline the need for our two governments to work together as we prepare to leave the EU.

"Brexit will bring new opportunities. We need to ensure Scottish business can take full advantage."

Scottish Labour's economy spokeswoman Jackie Baillie said: "It is a huge relief that Scotland has avoided recession but this was a narrow escape for our fragile economy.

"Far from a vote of confidence in the economy, as Economy Secretary Keith Brown has claimed, Scotland is not out of the woods yet and SNP ministers need to redouble their efforts."

Scottish Liberal Democrat leader Willie Rennie said: "Scotland has had a brush with recession.

"The big picture is of an erratic and patchy economy. One quarter down followed by one quarter up is clear evidence.

"The long-term route out of this is significant investment in education and skills."