Scottish economy grows as UK stagnates, new data reveal

Scottish Government figures show the economy north of the Border grew by 0.3% month-on-month in July on a seasonally adjusted basis.

Deputy First Minister Kate Forbes highlighted the growth in manufacturing, and in information and communications services revealed in the July figures.

The Scottish data do not include offshore oil and gas extraction.

The Scottish gross domestic product figures for June have been revised to show a flat month-on-month position, rather than a 0.3% decline as had been estimated in late August.

Quarter-on-quarter growth in Scottish GDP in the three months to June is unrevised at 0.6%, which matches the rate of expansion in the UK as a whole over this period.

Publishing the data, the Scottish Government chief economist directorate said: “The two industries which made the biggest contribution to overall GDP growth in July were manufacturing, and information and communications services, both of which contributed 0.1 percentage points of growth to headline GDP.”

Read more: Scotland can be 'true global contender' on green finance, declares Forbes

It noted that, comparing the three months to July with the February to April period, Scottish GDP was up by 0.3%, observing this is a decrease in the growth rate compared with that in the second quarter.

The Scottish Government economist directorate flagged the impact of summer sporting events, including the Euro 2024 football championships and Paris Olympics, on some sectors in July.

It said: “Comments provided for July 2024 suggested some industries may have been affected by various sporting events held throughout July. Sporting events boosted output in the arts, entertainment, and recreation sector. While many of these events normally occur in July each year, this year many businesses reported higher turnover than in previous years.

Read more: Famous 'much-loved' Scotch whisky brand being sold in blockbuster deal

“Sporting events were also one of the main reasons cited for the monthly increase in retail trade in July. Licensed premises noted a positive impact specifically from the European football championships; however, some restaurants cited this as [a] negative impact on footfall. Despite falling on the month, some travel agents also noted an increase in bookings because of the Summer Olympics in Paris.”

Ms Forbes, who is also Cabinet Secretary for Economy and Gaelic, said: “These figures show that Scotland’s economy is recovering steadily, having grown over the last two quarters. It is particularly encouraging to see that manufacturing, and information and communications services expanded in July.

“We are stepping up action to drive economic growth. Our programme for government and green industrial strategy set out measures to support start-ups, reduce barriers to investment and work in partnership with businesses.”

The Scottish economy, which unlike the UK as a whole avoided falling into recession at the end of last year, expanded by 0.5% in the first quarter of 2024. The UK economy grew by 0.7% in the opening three months of this year as it exited recession.

Read more: Ian McConnell: What really drove sale of famous Scotch whisky brand?

When the second-quarter GDP figures for Scotland were published late last month, Ms Forbes flagged confidence in Scotland’s medium and long term prospects in spite of the “continuing challenges posed by Brexit”. She declared the Scottish Government looked forward to working with the UK Government on the “challenges”.

Kevin Brown, savings specialist at Scottish Friendly, said of the July GDP figures for the economy north of the Border: “For Scottish households this is modestly good news as it means the Scottish economy is weathering the challenging fiscal environment. With interest rates set to fall further toward the end of the year, this could provide a further boost to households and businesses alike.”