Mixed picture on Scottish economy

The Scottish economy grew by just over 2% in the year to March, according to the latest Gross Domestic Product figures.

The service sector grew by more than 3% but construction fell by 3%. Manufacturing was also lower.

Retail sales figures have grown by 2% in the year to June.

The figures came as a CBI Scotland survey cited expectations of a slowdown and rising costs for a sharp decline in confidence among manufacturers.

The CBI Scottish Industrial Trends Survey also warned that Scottish manufacturers faced a difficult quarter ahead with domestic orders, output and employment all expected to fall.

The director of CBI Scotland, Iain McMillan, said the results were "very disappointing".

He said: "These latest results reveal that rising costs and declining demand are causing business confidence in the sector to sharply deteriorate.

"Hopefully these tough conditions will prove to be short-lived.

"However, it does reinforce the need for government, at every level, to promote policies that help build our economy and avoid policies that damage our competitiveness and the image of Scotland as a place to do business."

The survey found that average unit costs had risen at the fastest rate since 1980.

It also said that export orders were expected to see a modest fall over the upcoming quarter.

However, Scottish manufacturers said they were less optimistic about export prospects for the year ahead.

Growth in sales was almost entirely down to food sales, boosted by higher food prices. Non-food sales suffered their worst drop for two and a half years.

John Swinney, Cabinet Secretary for Finance and Sustainable Growth, said:

"Scotland's recent growth record, relative to that of the UK, gives cause for continued confidence in our economic performance.

"Growth in the Scottish economy has matched or surpassed that of the UK in each of the past three quarters - the first time that has happened for many years.

Finance Secretary John Swinney said: "Today's GDP figures provide further evidence of continuing resilience in the Scottish economy.

"Last week's labour market statistics showed rising employment, record low unemployment and higher activity rates.

"Retail sales continue to grow at a faster rate in Scotland compared to the UK, while recent energy announcements highlight bright prospects for the Scottish economy."

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