By Ian McConnell
Business Editor
THE Scottish economy contracted by 0.2 per cent in July, underperforming the UK as a whole, as renewable energy generation dropped, official figures showed yesterday.
Figures published earlier this month by the Office for National Statistics showed UK gross domestic product edged up by 0.1% in July, its weakest month-on-month growth so far this year and way adrift of a forecast 0.5% rise.
The Scottish Government said yesterday of its latest data for the economy north of the Border: “This is the first monthly fall in GDP since January, and reflects an underlying slowdown in the rate of recovery seen after the easing of restrictions in recent months.”
GDP in Scotland in July was 2.4% adrift of its February 2020 level, before the coronavirus pandemic hit. UK GDP in July was 2.1% lower than its pre-pandemic level.
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The Scottish Government highlighted a weather-related tumble in renewable electricity generation in July.
It said: “In July, the largest negative contribution to growth was a 9.9% drop in output from the electricity and gas supply sub-sector, due to unusually low levels of wind and hydro-generated electricity during the summer.”
Overall production sector output in Scotland dropped by 3% month-on-month in July, with the manufacturing, and mining and quarrying categories also contracting.
The Scottish figures exclude output from offshore oil and gas extraction.
Construction sector output declined by 0.4%.
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However, output of the dominant services sector, which accounts for about three-quarters of the economy in Scotland, increased by 0.4%. Nine of the 14 services sub-sectors showed growth. Financial and insurance services output grew by 1.7%, according to the data, and the information and communication sub-sector expanded by 3.6%.
Scottish GDP in the May to July period was up by 3.4% on the preceding three months. It had over the April to June period been up by 4.7% on the opening three months of this year. In the UK as a whole, GDP in the May to July period was up by 3.6% on the preceding three months.
Scottish Economy Secretary Kate Forbes said: “It is positive to see sectors, including the service sector which was particularly affected by the pandemic, continue to grow. Although monthly figures will fluctuate, especially in the current economic conditions, it is encouraging that the Scottish economy has grown by 3.4% in the last three months. Conditions remain difficult for many businesses – especially as a result of ongoing consequences from Brexit."
She flagged her view that, "despite these challenges", the "resilience and ingenuity of business" was helping create "conditions for sustainable economic growth".
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