Outlook and appraisal [May 2001]

Ashcroft, Brian (2001) Outlook and appraisal [May 2001]. Quarterly Economic Commentary, 26 (2). pp. 3-7. ISSN 0306-7866

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Scottish growth strengthened throughout last year but despite outperforming the UK economy in the final quarter growth was weaker than in the UK over the year as a whole. The improvement in Scottish growth was led by the service sector although only one sector, hotels and catering, managed a significantly better performance than its UK counterpart for the year as a whole. Construction, agriculture, and mining & quarrying performed better in Scotland than in the UK during 2000, while manufacturing fared worse. Within manufacturing, the weakest sectors over the year relative to the UK were metals, chemicals, paper, food and electronics. Electronics, while still growing has begun to lag behind the sector in the UK, thus reversing a trend that has persisted since the mid-1990s at least. The sector is clearly experiencing a cyclical downturn but it is feared that structural problems in the industry may be affecting Scottish electronics disproportionately. The closure of Motorola's Bathgate plant may be a sad and depressing example of such problems. It appears likely that growth in the Scottish economy will have followed the slowdown experienced in the UK economy during the first quarter.