SCOTLAND’S economy has shrunk by almost a quarter since the start of the coronavirus pandemic, with a near total collapse in the tourism and hospitality sectors.
Official figures from the Scottish Government said onshore Scottish GDP fell by 5 per cent in March and then by a further 18.9% in April as the economy was shuttered to stop the spread of the virus.
However the cumulative fall in GDP of 23% was not evenly spread.
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The total drop in accommodation and food services was a staggering 85%.
Also unable to rely on home working, Arts, Culture & Recreation Services were down 51% as theatres, cinemas, galleries and concert venues closed.
Construction was down 43.5%, retail and wholesale down 35%, and production 22.6%.
Overall, the critical services sector was down 21.7% since February.
Reacting to the unprecedented numbers, the SNP Government called for more powers for Holyrood and an extension to Brexit.
The Office for National Statistics last week said UK GDP shrank by a record 20.4% in April after a 5.8% fall in March.
Other, lagging statistics showed Scottish GDP falling 2.5% over the first three months of 2020, as the lockdown first began to bite.
The fall in UK GDP in Q1 2020 was 2%.
The Government said the new monthly GDP statistics for Scotland had been developed specifically to help track the economic impact of Covid-19 and to assist in the response.
They are designated “experimental official statistics”, meaning they are still in development, with all results “provisional and subject to relatively high levels of uncertainty”.
The Government said the Scottish falls were “very similar to the pattern seen across the UK as a whole” in the first weeks of the lockdown.
"When viewed across the two months of March and April, the total fall in output since February is provisionally estimated as 23%, and output has fallen by an unprecedented amount in nearly every industry of the economy," it said.
Scottish Secretary Alister Jack said: “These figures confirm the terrible impact coronavirus has had on our economy.
“The UK Government has put in place unprecedented measures to support people.
"Our furlough scheme, and support for the self-employed, has protected the incomes of almost 800,000 Scots - a more than quarter of the workforce.
"That's been accompanied by an extra £3.8 billion of funding for the Scottish Government.
“Across the UK we will continue to prioritise public health.
But now the Scottish ‘R value’ is holding below one, we must also start looking at how to open our economy safely.
"People need to get back carefully to a more normal way of life, and the Scottish Government should keep an open mind about the measures needed to get Scotland moving again.
“We will do everything we can to continue to support our great Scottish businesses as they begin to slowly reopen and start to recover in the weeks and months ahead.”
Scottish Labour Leader Richard Leonard said it was clear the pandemic was infliciting "enormous damage" on Scotland’s economy.
He said: "We are now deep into uncharted economic waters with the prospect of mass unemployment looming.
"If action is not taken by both the UK and Scottish governments, with a clear plan to get the economy back on course, then we may be left with an economy in tatters.
"This is not just a downturn in the economic cycle, it is a structural shift in the economy.
“Manufacturing and new high-skill jobs must be at the heart of any recovery plan if we are to avoid losing an entire generation to unemployment and underemployment.
“If we are to protect our economy it is vital that we understand that the fundamental shift necessary during the lockdown is continued post-lockdown with the state playing an innovative and central role in supporting jobs and stimulating businesses.
“The scale of the crisis before us demands a transformational response from the Scottish Government that puts the wellbeing of the people of Scotland at the heart of the post-pandemic economy.”
The Scottish Retail Consortium's latest sales monitor also reported sales down 27.6% in May compared to the same month in 2019, a slight improvement on the record 40% slump seen in April.
Ewan MacDonald-Russell of the Scottish Retail Consortium said: "The stark fall in retail GDP is further evidence of the seismic impact of coronavirus on Scottish retailers, and is corroborated by the retail sales figures the SRC published this morning.
"The retail industry is crucial to the Scottish economy, providing jobs, products, services, and a route to market for customers and other businesses.
"As soon as it is safe, shop owners across the country want to bring staff back to work, raise the store shutters and start welcoming customers back into store.
"That can only happen once firm timetable for opening is laid out; along with a strategy involving plans for town and city centres and short-term economic stimulus to encourage Scots to start shopping again.”
Andrew McRae, of the Federation of Small Businesses in Scotland, added: “These new numbers show the epic scale of the challenge ahead of us.
“Half of the country’s small business community closed their doors during this crisis which led to a big drop in economic output.
"That’s why many in business desperately want the First Minister to announce on Thursday an accelerated timetable for easing trading restrictions.
“As the lockdown eases, we must see decision-makers back our local high streets, giving firms that have faced a torrid year a break at every opportunity.”
Mairi Spowage, Deputy Director of the Fraser of Allander economic thinktank at Strathclyde University, said the contractions in Scottish GDP were "similar to the magnitudes of fall seen at the UK level".
She said: "These are completely unprecedented figures, but we should remember these were completely expected given the measures that have been taken to protect public health.
“As we know, lockdown started to ease slightly during May, and particularly into June.
"This may mean that in GDP terms, we see growth come back to the figures for May and June.
"However, the bad news for people’s jobs and livelihoods is likely to continue.
"We are expecting to see significant rises in the unemployment rate and business insolvencies as businesses find they cannot operate without schemes like the job retention scheme, and given the lower capacity they may have to earn income due to continued physical distancing measures.
"Coupled with suppressed consumer demand, this will mean that things are likely to get worse for businesses and workers before they get better.”
SNP Economy Secretary Fiona Hyslop said: “The coronavirus pandemic is having an extremely serious impact on the economy right across the UK and - as these figures demonstrate - Scotland is no exception.
“Ever since the start of this crisis the Scottish Government has been working tirelessly to keep businesses afloat and ensure as many people as possible keep their jobs, and we will continue to do that. So far this has included a tailored package of more than £2.3billion in business support.
“Yesterday we announced a £230 million Return to Work package to help stimulate Scotland’s economy following the pandemic.
"This initiative, covering construction, low carbon initiatives, digitisation and business support, will help to create jobs and generate a flow of work for businesses.
"We have also set up an Advisory Group on Economic Recovery, led by Benny Higgins, which will advise soon on further actions needed to support recovery.
“Today I will join ministerial colleagues for a Labour Market Summit where we will talk with Skills Development Scotland and the Scottish Funding Council to ensure a co-ordinated approach to tackling unemployment and giving people skills for the jobs that will be needed as we emerge from the pandemic.
“It is now essential that the Scottish Parliament is granted the additional powers it needs to properly manage the response to the crisis as we move towards recovery.
"It is also the case that the last thing our businesses need is further economic turmoil as a result of a no-deal Brexit.
"That is why we have repeated our calls for the UK Government to agree an extension to the transition period.”
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