Following the latest GDP figures, Professor Graeme Roy, Director of the University of Strathclyde’s Fraser of Allander Institute, said:
“The GDP data released today are deeply disappointing.
“We previously warned that this was a fragile time for the Scottish economy and that a contraction in output towards the end of 2016 was entirely possible. Sadly, these fears have now been realised.
“With the Scottish economy shrinking in the final quarter of 2016, this means that the Scottish economy did not grow at all through 2016.
“At a time when the UK economy grew at 1.8% over the same period, this is a serious cause for concern. With any Brexit uncertainty affecting the UK as well, it’s hard to argue that Scotland’s relatively weaker performance can be explained by the outcome of the EU referendum.
“While the downturn in the Oil and Gas sector remains part of the explanation, it is difficult to ignore the substantial declines in construction over the past year (-6.0%) or in Manufacturing (-7.3%) – with all areas of manufacturing, not just those tied to the North Sea supply chain shrinking during 2016. A new concern is the exceptionally weak performance in the all-important Scottish services sector, which saw no growth at all during the final three months of 2016.
“Today’s figures therefore confirm a more general slowdown in Scotland’s economy.
“For both the UK and Scottish Governments, it is hard to imagine a clearer call for practical and direct action to support the Scottish economy than the data released today.”