Brexit blamed as Scots economic growth stalls

The Scottish Government said that following a period of sustained economic growth, Scotland’s gross domestic product (GDP) contracted by 0.3% in the second quarter – the three month period after the UK’s original EU departure date at the end of March.

“This contraction follows relatively robust growth (0.6%) in the first quarter in 2019, which was supported by a notable acceleration in manufacturing sector output as firms stockpiled and moved to complete orders prior to the original Brexit deadline,” said the Scottish Government.

Compared to the same quarter last year, Scotland’s GDP grew by 0.7%.

Since the start of 2019, growth has been in line with the UK.  

Economy Secretary Derek Mackay said: “Given the repeated warnings from business organisations and the contraction across the UK in the same quarter, it is unsurprising, but deeply frustrating that we are now seeing the Brexit impact on the Scottish economy.

“The responsibility for this contraction lies entirely with the UK Government.

“There can now be no doubt that any form of Brexit will damage our economy and a ‘no deal’ Brexit would be disastrous for Scotland and could push the country into recession.

“Scotland did not vote for Brexit, but our economy is paying the price for it and we are likely to see continued volatility as businesses try and prepare for the looming October Brexit deadline and the increasing thread of a ‘no-deal’ exit.

“We are already taking steps to protect jobs and our economy from Brexit but not every impact can be mitigated.

“We will continue to stand firm against efforts to take us out of the EU against our will.”

During the second quarter, output in the construction sector contracted by 2.2%, output in production contracted by 1.1%, and output in the services sector grew by 0.1%.

Two sub-sectors of manufacturing (food and drink, pharmaceutical and related industries) account for more than half of the 0.3% contraction of this quarter.

Manufacturing output in these sectors fell back after a strong first quarter.