Scottish economic output better but it is still ten per cent below pre-lockdown levels



Scotland’s Gross Domestic Product (GDP) grew by 6.8% in July but is still 10.7% below pre-lockdown levels, according to the latest Scottish Government monthly estimates.

Economic output in Scotland fell by 4.9% in March when coronavirus restrictions were imposed, followed by a 20.1% drop in April.

Since then, just over half of the lost output has been restored, with growth of 3.1% in May, 6.7% in June and the latest forecast of 6.8% in July.

But GDP is 11.3% down on July 2019 levels, according to the economic forecasts.

The GDP forecasts are a summary measure of economic activity, covering the activities of households, businesses and government as both producers and consumers.

They account for Scotland’s onshore GDP, so exclude offshore oil and gas extraction.

Broken down by sector, the service industries increased output by 5.5% in July although it remained 11.9% down on February’s GDP figure.

Accommodation and food services – which suffered a 77.2% contraction in April – saw 70% growth in July, according to the latest estimates.

However, the sector is still 52.2% below its “normal” level, the report states, adding: “This reflects the ongoing disruption to normal business activity and reduced demand from consumers.”

Arts, culture and recreation saw an 18.8% monthly increase in output, but that was more than a quarter (25.1%) down from the same time last year.

The production sector increased by 8.6% month-on-month in July, bringing it to 5.5% below the pre-lockdown level.

Output in the construction sector is estimated to have grown by 23.4%, although it is still 11.9% lower than February.

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Output in the agriculture, forestry and fishing sector is believed to have fallen by 0.1% in July. Compared to February, total output in the sector remains down by 5.3%.

Economy Secretary Fiona Hyslop said: “Scotland’s GDP is provisionally estimated to have grown by 6.8% in July with all three main industry sectors of the economy growing.

“While this marks a third consecutive month of growth for our economy we know the coronavirus pandemic continues to have an extremely serious impact.

“We are working hard to rebuild a stronger, more resilient and sustainable economy for Scotland – with a laser focus on creating new, good, green jobs.

“However, we want to do more and continue to press the UK Government for the additional financial powers that would enable us to tailor a bespoke response to the crisis.

“I have also called on the UK Government to urgently implement some form of extension to the furlough scheme, so we can continue to provide help for the sectors that have been most heavily affected by Covid-19.

“Extending this support for eight months at a cost of £850m could save 61,000 jobs in Scotland. Factoring in wider economic benefits, such as increasing GDP, it could pay for itself.”



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