THE Scottish economy grew by 0.4% in the first quarter, as the dominant services sector expanded by 0.8% and manufacturing output increased by 0.5%, official data show.

This 0.4% growth in gross domestic product north of the Border, revealed in seasonally-adjusted figures published yesterday by the Scottish Government, exceeded 0.2% expansion in the UK as a whole on a comparable basis.

However, the pace of growth in Scotland in the opening three months of this year, equivalent to about 1.6% on an annualised basis, remained below the longer-term trend rate of growth of about 2% per annum north of the Border.

Strathclyde University's Fraser of Allander Institute economic think-tank has calculated that annual growth of about 2% is necessary in Scotland to prevent unemployment from rising.

The rise in manufacturing output in Scotland in the first quarter was in stark contrast to a 0.2% fall in the UK as a whole.

Manufacturing output in Scotland in the first quarter was up 1.9% on the same period of 2012. UK manufacturing output in the first quarter was down 2.6% on the opening three months of last year.

Within Scottish manufacturing, the transport equipment sub-sector was a stand-out performer in the opening three months of this year, with a 6.2% quarter-on-quarter jump in output.

Professor Brian Ashcroft, economics editor of Fraser of Allander's regular commentary, said of the latest Scottish GDP data: "I think what we can conclude from this is there is some further evidence of a recovery, albeit fairly slight, and that the Scottish economy is performing slightly better than the rest of the United Kingdom.

"I think what is also interesting is that manufacturing seems to be doing a little better here, which is also quite good."

He added: "I think this is quite good news, but we are still talking about a slowish recovery. Still, we are talking about an economy, even on these figures, that would be growing at just over 1.5%-a-year, which would be less than trend."

Highlighting the fact that it was five years since the onset of the Great Recession of 2008/09, Mr Ashcroft added: "By this stage, we should really be expecting stronger growth than this...

"This is good news, but we shouldn't get too ecstatic about this. We need to see many more quarters of growth at least as good as this before we can say we are moving away from the Great Recession consequences."

Mr Ashcroft, emeritus professor of economics at Strathclyde University, noted that GDP in Scotland was still about 2% below its pre-Great Recession peak.

He added that growth of more than 2% per annum would be required in the Scottish economy before unemployment would start to fall on a sustained basis.

While manufacturing and services activity grew in Scotland in the first quarter, construction output dropped by 2.5%.

Michael Levack, executive director of the Scottish Building Federation, said: "These latest Scottish GDP figures highlight the continuing tough trading conditions the construction sector has faced during the first three months of 2013. Given that 2012 was a particularly bad year for the industry, signs that output continued to fall at the beginning of this year are very disappointing. They underline the need for sustained measures to rebuild industry confidence and capacity."

Services sector growth in Scotland in the first quarter was comfortably ahead of a corresponding 0.5% pace of expansion in the UK as a whole.

Within the Scottish services sector, output in the financial and insurance activities category grew by 5% during the first quarter. However, activity in this sub-sector is still nearly 13% below its peak in the second quarter of 2008.

Among other services sub-sectors, real estate activities enjoyed expansion of 1.2% in the first quarter. Output of the professional, scientific, administrative, and support services category also grew by 1.2%. There was, however, a 1% quarter-on-quarter decline in output across the retail and wholesale sub-sectors.

In manufacturing, output of the food, beverages and tobacco sub-sector grew by 0.6% in Scotland in the first quarter. But there was a 0.3% fall in output of the computer, electrical and optical products sub-sector in the opening three months of 2013.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: "These figures reinforce the key message apparent from the Scottish Chambers of Commerce quarterly business survey released last week, that we are experiencing very fragile economic recovery."

Andy Willox, the Federation of Small Businesses' Scottish policy convenor, viewed the GDP figures as "yet another indication of a tentative economic recovery".