SCOTLAND’S economy contracted during the final quarter of 2010 as business was hit by icy winter weather.
Gross domestic product – GDP – fell by 0.4% between October and December last year following a 0.5% rise in the third quarter of 2010.
Finance Secretary John Swinney said the figures showed the Scottish economy had performed better than the UK which saw GDP fall by 0.5% in the last quarter of 2010.
However, his political opponents criticised his comments, and called for more support for businesses.
The figures, released by the Scottish Government, show construction sector output was down 2%, the services sector down 0.1% and the production sector down 0.5%. Despite GDP falling in the final quarter, the annualised rate of growth for 2010 was up 0.8%, compared with 2009.
Comparing 2010 with 2009, annual output from the services sector was down 0.1%, the production sector was up 0.5% and construction was up 11.2%.
Swinney said: “Despite the weather in Scotland being far more severe for much longer than south of the border in November and December, the GDP figures show that, against expectations, the Scottish economy performed better than the UK as a whole in the fourth quarter of last year, including in the construction and services sector. But today’s figures show that we need to strengthen Scotland’s recovery.”
Liberal Democrat Finance spokesperson Jeremy Purvis said: “For the SNP to try and claim these are somehow positive figures for Scotland is insulting to the Scottish businesses who continue to struggle.”
Labour leader Iain Gray said the statistics made “grim reading“. He also raised concern about the number of businesses becoming insolvent.
Official figures also released yesterday show company insolvency numbers in Scotland increased 11% during the first quarter of 2011, up 4% on the same period of 2010.
The figures, produced by Accountant in Bankruptcy, show fewer claims for personal insolvency in Scotland for the first three months of this year, down 7% on the final quarter of 2010. However, bankruptcy numbers went up by 8% over the same period.
Gray said: “With business insolvency also up by a third, this shows that Scotland needs a government that will concentrate on what really matters.” Meanwhile, the Scottish Building Federation said the GDP figures bear little relation to the “real world”.
Chief executive Michael Levack said: “Private sector construction still has a mountain to climb to get back to anywhere near the rates of output it was showing two years ago. And with budgets being slashed, public contracts are drying up fast.
“What is more, we have seen the number of firms becoming bankrupt rise by 11% at the close of 2010.
“If we examine the detail of these figures, I suspect they will show the construction industry contributing substantially to that rising trend.”
CBI Scotland director Iain McMillan said: “The very poor weather had a significant negative effect on the economy at the end of last year, as evidenced by the particular falls in construction and logistics.”
