Scotland's output falls by nearly 2% in first quarter

Image source, PA Media

  • Author, Douglas Fraser
  • Role, Business and economy editor, Scotland

Output from the Scottish economy fell by nearly 2% in the first three months of this year, slightly faster than the UK contraction of 1.5%.

The Scottish government's first estimate of Gross Domestic Product, down by 1.9%, showed construction continuing to grow, as did production.

But the large services sector saw the value of its output down by 3%.

That includes restaurants, hotels, bars and hairdressers forced to close during those months.

Compared with the start of last year, output was down by 5.4% - less than the UK decline of 6.1%.

Since March, easing of lockdown measures has allowed more activity, and it is expected the second quarter of the year will see a strong rebound.

The 20% decline in output during the second quarter of last year was followed by a sharp rebound in July to September 2020.

Hospitality hardest hit

Liz Cameron, chief executive of the Scottish Chambers of Commerce, commented: "It is clear that Scotland's hospitality sector has been hardest hit and has borne the brunt of the restrictions over the winter months which paints a worrying picture for their ability to recover without greater support.

"Businesses want to see the economy re-opened with as few restrictions as possible. If government can deliver this, businesses will be able to rebuild confidence and increase economic activity in the second quarter of this year.

"The vaccination programme will be key to securing economic growth. Increased clarity on the re-opening of our economy and the eventual removal of restrictions, combined with continued financial support for businesses from the Scottish and UK governments will propel business recovery and support a return to pre-pandemic economic output sooner."