THE closure of the Grangemouth oil refinery has hit the Scottish economy hard, new figures show.
Statistics released by the Scottish Government show a drop-off of 0.4% in GDP growth in the three months up to May – effectively wiping out the 0.4% increase seen in the first three months of the year.
In May, estimates by the Government found GDP contracted by 0.2%, following a boost of 0.1% the month before.
The biggest drop-off in the three months up to May was seen in the manufacturing sector, which was hit by the closure of the refinery.
Owner Petroineos announced last year the refinery would be turning into an import terminal, leaving Scotland without its own refinery and posing one of the first major tests of both the UK and Scottish governments in their push for a just transition away from oil and gas.
Repeated attempts to halt the closure ultimately failed, with the loss of around 100 jobs, though plans for future use of the site have been put in motion as both governments seek external investment.
As a result of the closure, manufacturing output in Scotland reduced by 4.1% in May.
Deputy First Minister Kate Forbes (above) – who also has responsibility for the economy – said the figures show the UK economy to be “less productive and more unequal than independent European countries comparable to Scotland”.
“While Scotland’s GDP growth of 0.4% in the first quarter shows a positive start to the year, like the rest of the UK we have been affected by ongoing global challenges, including more difficult trading conditions,” she said.
“The latest monthly figure demonstrates the cessation of oil refining at Grangemouth has contributed to a reduced output in the manufacturing sector.
“Ministers are working closely to provide a just transition for the workforce and we have so far committed around £87 million to support the industrial cluster, including the £25m Grangemouth just transition fund and up to £450,000 to support affected workers to transition into new roles.
“By pursuing new investment opportunities and supporting entrepreneurship, the Scottish Government is taking steps to grow Scotland’s economy.
“But these and other economic statistics increasingly show that the UK’s economy is less productive and more unequal than independent European countries comparable to Scotland.
“Ultimately, only the powers of independence will allow us to create a wealthier and fairer nation for everyone in Scotland.”
