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Scots economy grows by 1%, moving past its pre-recession peak

The Scottish economy grew by 1% in the first three months of the year, moving beyond its pre-recession peak, according to new figures.

Scotland's Gross Domestic Product (GDP) grew faster than the UK as a whole over the first quarter of 2014, with output now 0.4% above its pre-recession level.

On an annual basis, GDP grew by 2.6% compared to the first quarter of 2013.

Finance Secretary John Swinney said: "Today's figures mark an important stage in our recovery.

"These positive output figures show that Scotland's economy continues to go from strength to strength with growth of 1% over the quarter and 2.6% over the year - the fastest annual growth in over three years.

"Nearly six years on from the start of the financial crisis, our economy is now larger than before the downturn.

"Output in Scotland is at record levels and we have exceeded our pre-recession peak at least one quarter ahead of the UK.

"Over the last quarter the improvement in our economy has been broad-based with welcome signs of growth in manufacturing which was up 3.4% and services which account for over 70% of our economy up 0.9%."

Growth in the services sector of 0.9% in the first quarter of 2014 was driven by growth in business, services and finance.

The production sector, which grew by 2.1% in the quarter, was aided by a strong performance in manufacturing, including a 14.1% increase in refined petroleum, chemical and pharmaceutical production.

Meanwhile, the construction sector contracted by 1% during the same period.

The latest figures show that GDP for the UK as a whole grew by 0.8% in the first quarter of 2014, while on an annual basis it grew by 3%, comparing this period with the same period in 2013.

The latest GDP figures for Scotland come after the country's economy grew at a slower pace than the UK's in the final quarter of 2013, affected by a sharp fall in production at the Grangemouth petrochemicals complex during an industrial dispute.

Over the six-month period comprising the final three months of 2013 and the first three months of 2014, Scottish GDP is now estimated to have grown by 1.2%.

Taking into account the 8.1% contraction in refined petroleum, chemical and pharmaceutical production in the last quarter of 2013, and the growth of 14.1% in the latest quarter, the sector grew by 4.8% over the six-month period.

The figures were welcomed by Liz Cameron, chief executive of Scottish Chambers of Commerce.

She said: "Various sectors are experiencing an increase in economic activity and future investment will be essential to continue this journey.

"Particular attention should be paid to monitoring the skills shortage in some sectors to maintain the path of growth."

Grahame Smith, Scottish Trades Union Congress general secretary, said: "It is good that Scottish GDP is now above pre-recession levels.

"However it is complacent and somewhat misleading to crow about record levels of output.

"The truth of the matter is that the economy may never recover output lost due to the recession and the prolonged period of stagnation that followed. Manufacturing has yet to recover and there are precious few signs of sustainable 'rebalancing'."

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