Scottish GDP grew by 0.8% in the first quarter of 2017, averting recession following a 0.2% contraction in Q4 2016. Scotland’s 0.8% growth compares with 0.2% in the UK as a whole, 0.4% in the United States, and 0.6% in the euro area1.
The other main points from the government’s latest GDP publication:
- Scottish GDP per person grew by 0.7% during the first quarter of 2017.
- In the first quarter of 2017 services in Scotland grew by 0.3% and production grew by 3.1%, while construction contracted by 0.7%.
- Compared to the same period last year (i.e. 2017Q1 vs 2016Q4), the Scottish economy grew by 0.7%. Equivalent UK growth was 2.0%.
The Fraser of Allander Institute (FAI) offered some key reasons for the significant growth in the production sector:
- Firstly, the figures show a substantial rise of over 7% in metals manufacturing, driven in part by the re-opening of the Dalziel steel plant.
- Secondly, as our latest Oil and Gas survey highlighted, there has been a growing return to confidence in the oil and gas supply chain. The data published today appears to indicate that this has actually now translated into a welcome degree of bounce-back in actual activity within the sector.
- Thirdly, the figures report massive growth of over 12% in refined petroleum output which is largely output from Grangemouth. We’d urge caution with this series as it’s especially volatile […]
- Finally, other sectors of manufacturing have also bounced back from a weak 2016. Food and drink for example, also grew strongly by historical standards.
The FAI on longer-term performance:
[…] [I]f Scotland can — over the remaining three quarters of 2017 — secure its average quarterly growth rate of 0.35% then this will bring in 4Q-on-4Q growth over 2017 of 1.2%. Identical to our June forecast.
- Source: Scottish Government Chief Economic Adviser’s June 2017 monthly economic brief.