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Scottish economy growth overtakes that of UK

The rate of growth in the Scottish economy has overtaken that of the UK, according to official statistics.

Figures published on Wednesday show that in the fourth quarter of last year, Scotland's GDP rose by 0.3%. It is above the GDP growth for the UK over the same period, which was 0.2%.

Finance Secretary Derek Mackay welcomed the figures and said the Scottish Government would continue to support business and job growth.

Stockpiling hits all-time high among SMEs as Brexit looms 

The value of Scotland's GDP is estimated at £178.6 billion, or £32,800 per person, including oil and gas extraction in Scottish waters.

Analysis suggests the most influential industry sector in Scotland last year was in manufacturing, with output increasing by 3.2% in total.

Strong increases in the manufacture of computer, electrical and optical products, as well as in the food and drink industry, were recorded.

Business confidence rises despite uncertainty, says Bank of Scotland 

On average, over the three years from 2015 to 2017, Scottish GDP has grown by 0.8% a year.

The growth in 2018 (1.3%) is higher than the recent average growth rate, indicating an improvement in the economy.

Over the 30 years from 1988 to 2018, average growth has been 1.7% a year.

Lindsay Gardiner, chairman at PwC Scotland, said: "Today’s growth figures remain pretty weak, reflecting the pattern of the past year. While the marginally stronger performance of the Scottish economy in this quarter, relative to the UK as a whole, is welcome, the outlook remains uncertain.

"When we look at the annual growth, it does appear that Scotland’s economy, like that of the UK, is in recovery mode. Having averaged 0.8% in the years between 2015 and 2017, the economy grew by 1.3% in 2018, led by a strong acceleration in manufacturing, which helped outweigh a decline in the construction industry.

“PwC has predicted a slip to 1.2% in 2019 before accelerating to 1.6% in 2020, in line with the UK – as the headwinds caused by Brexit uncertainty come to a head.”

Gardiner warned that the Retail Sales Index for Scotland told a different story from that of GDP.

He said: “The growth in retail sales in Scotland is markedly slower than in Great Britain overall, which illustrates the scale of the challenge on our high streets. At +1.2% in volume and +1.1% in value, Scotland is 0.4 and 0.5 percentage points behind GB growth.

“One aspect which will be of interest to retailers is that for the first time in almost three years, volume has increased at a faster rate than value, indicating that consumers are looking for better deals when they do spend. 

“With PwC’s recently published report into retail sales showing that in Scotland more than 265 shops closed across the eight largest towns and cities in the country last year, with only 146 opening. To combat this retailers must look at their offering and ensure they have the right proposition, and the investment to deliver it.”

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