By Martin Kelly
The Scottish economy received a massive boost today with the latest figures revealing growth of 0.5%, bucking the UK trend.
The growth for the last three months of 2012 was in contrast to a 0.3% contraction experienced by the rest of the UK over the same period.
The figures mean that Scotland escapes the risk of a triple dip recession when figures for the first three months of 2013 are released. However there remain fears that the UK may show contraction for the first quarter of this year which would see the UK enter its third recession in four years.
Economists believe it is too close to close call whether first quarter data, due to be published next week, will show another UK contraction which will technically mean the beginning of a triple-dip.
Welcoming the news of Scottish growth, Scottish Chambers of Commerce Chief executive Liz Cameron said: “The news that Scotland’s economy grew strongly for the second consecutive quarter is extremely welcome and is in contrast to the more gloomy figures for the UK as a whole.
“Nevertheless we still anticipate fairly weak overall growth trends during this year, meaning that there is no room for complacency when it comes to government action to help ensure a competitive economic environment in Scotland.”
There was further good news for the Scottish economy with the publication of a new set of employment figures that showed unemployment in Scotland fell by 11,000 between December and February. This contrasted with the rest of the UK were unemployment rose by 70,000.
The number of people unemployed in Scotland stands at 197,000 which is the lowest for almost four years. In the UK, the number of people out of work stands at 2.56 million. The Scottish unemployment rate now sits at 7.3% compared to a UK rate of 7.9%.
Figures published by the Office for National Statistics show that Scottish employment rose by 39,000 in the three month period to December to February, the largest increase since May-July 2000.
The Scottish youth labour market continued its strong performance of recent months with the youth unemployment rate now down 6.8 percentage points over the year to December to February. The Scottish youth unemployment rate of 16.1 per cent is lower than the UK rate of 20.6 per cent and the Scottish youth employment rate of 56.7 per cent is higher than the UK rate of 49.7 per cent.
The news coincided with an announcement by Scottish Power of plans to create 2500 jobs over the next decade. The company plans to take on hundreds of engineers in order to make improvements to its grid network.
Visiting Scottish Power’s Hamilton offices to announce the major jobs boost Finance Secretary John Swinney said:
“It is very welcome to see these positive trends in employment and in economic growth for Scotland.
“Today’s figures show the highest increase in employment in a single quarter for twelve years with an increase of 39,000 jobs and unemployment is now below the 200,000 mark for the first time in over three years.
“These figures also show Scotland’s economy growing faster than the UK’s at the end of 2012 with a second consecutive quarter of growth.”
Mr Swinney said the Scottish government was adopting a specifically Scottish approach to increase competitiveness and build a sustainable economy.
The Finance Secretary added: “Today Scottish Power has announced its intention to create thousands of jobs in the West of Scotland and this is testament to our skills base and is welcome news for the area.
“We can build on these figures for the future but we can’t allow the UK Government’s economic policies to derail the positive developments we are seeing in Scotland.”
Scottish Labour finance spokesman Ken Macintosh said the Scottish government should be doing “so much more”.
He added: “Scottish women and young people are disproportionately affected by this recession, and the growth in the numbers of long-term unemployed will leave a scar for years to come.
“This is the same group who are being hit hardest by underemployment, so they desperately need access to training and part-time college places to keep their skills updated and help them into work.”
Yesterday saw the IMF slash its growth forecasts for the UK. The IMF said that the UK’s economy will grow by a mere 0.7% this year and by 1.5% in 2014 – a 0.3 percentage point cut for each year.
There was further good news for the Scottish economy when new figures showed that retail sales experienced their best performance for two years.