Services sector flat as onshore GDP slips 0.4%

Scotland’s onshore GDP fell by 0.4% in December, according to statistics announced on Wednesday by the Chief Statistician.

Output remains above the pre-pandemic level of February 2020, but only by 0.1%.

Output in the services sector, which accounts for around three quarters of the Scottish economy, was flat in December.

At the broad level, output in consumer facing services fell  by 2.5%, while health, education and public services output increased by 0.9%, and output in all other services increased by 0.3%.

Output in the production sector, which accounts for around 16% of the economy, fell by 3.3% in December.

Output in the construction sector, which accounts for around 6% of the economy, grew by 1.9% in December.

Using the experimental monthly statistics for Quarter 4 as a whole (October to December), GDP is provisionally estimated to have grown by 1.3% compared to Quarter 3.

Annual GDP is provisionally estimated to have grown by 7% in 2021, following the 10% fall in 2020.

Kevin Brown, savings specialist at Scottish Friendly, said: “The latest Scottish GDP figures are a mixed bag and suggest there may be a few bumps on the road yet for the economy in the coming months.

“While the economy grew 1.3% between the third and fourth quarters, it shrank 0.4% in December, leaving it just 0.1% larger than it was before the pandemic.

“It is slightly concerning that the services sector, which makes up three quarters of the economy, was flat in December.

“However, it is dangerous to draw conclusions from just one month.

“On top of that, there was evidence that people were shopping much earlier for Christmas last year, so therefore a slight slowdown in overall activity was to be expected in December.

“However, we expect sustained economic growth going forward, especially as the Scottish Government has confirmed that all Covid-related restrictions will be abolished from 21 March.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.