Scottish economy shrank 1.4% in November as Covid restrictions tightened

Scotland’s economy contracted in November, latest estimates indicate, as new nationwide coronavirus restrictions were introduced.

Provisional Scottish Government data indicates Scotland’s Gross Domestic Product (GDP) is estimated to have dropped by 1.4% in November, the first fall after six months of growth following the easing of the first lockdown.

The five-level system of restrictions came into force on November 2, with varying limits on hospitality and entertainment.

GDP is now 7.1% below the level seen last February, before the pandemic hit the Scottish economy.

The drop in November was driven by an estimated 2.2% decrease in the services sector, while the production sector rose by 0.8% and construction by 1.8%.

Economy Secretary Fiona Hyslop said: “Like the rest of the UK, Scotland’s economy has been badly hit by the coronavirus pandemic.

“As a result of the restrictions we have had to put in place to control the virus, our economy is now 7.1% smaller than it was pre-Covid-19, while over the same period the UK economy has shrunk by 8.5%.

“Combined with the huge economic uncertainty caused by Brexit, this remains an extremely tumultuous time for the economy and jobs.

“As a responsible Government, we continue to do all we can to protect Scotland’s economy and ensure that as many people as possible keep their jobs.

“This is backed by our package of support to businesses that totals over £3 billion, and our support for economic recovery worth more than £1 billion.”

She reiterated Scottish Government calls for Holyrood to be given the additional powers “it needs to properly manage the response to the crisis as we prioritise recovery”.

Scottish Secretary Alister Jack said the latest estimates “reflect the challenges we continue to face as a result of this global pandemic”.

He added: “The UK Government has invested over £280 billion to safeguard lives and livelihoods across the country – including through our furlough scheme which has protected nearly 780,000 jobs in Scotland. This direct support is on top of £8.6 billion extra funding given to the Scottish Government.

“Hope is on the horizon with the rollout of vaccines and we are taking steps to kick-start the economic recovery through our Plan for Jobs, expanding City and Region Growth Deals in Scotland and investing in a new Shared Prosperity Fund.

“As we continue to see during these challenging times, the strength of the union and support offered by the UK Treasury has never been more important.”