Construction sector output falls by 1.9 per cent in second quarter

construction stockOutput in the Scottish construction sector contracted by 1.9 per cent in second quarter of 2016, new statistics have revealed today.

According to official Gross Domestic Product (GDP) figures, the Scottish economy as a whole grew 0.4 per cent compared to the first quarter of 2016, though growth in the production industries and services industries (particularly business services and finance) was tempered by the construction industry contraction.

The construction sector accounts for around 6 per cent of the Scottish economy. While the sector enjoyed extremely strong growth during 2014 and early 2015, that growth has now tailed off, falling by 4.5 per cent between Quarter 2 2015 and Quarter 2 2016.

Scotland construction growth - quarter-on-quarter (percentage change)
Scotland construction growth - quarter-on-quarter (percentage change)

On an annual basis, compared to the second quarter of 2015, Scottish GDP as a whole grew by 0.7 per cent.

The services sector, which accounts for three quarters of the economy, grew by 0.5 per cent during the latest period, the production sector grew by 0.3 per cent.

The business services & finance industry had the greatest contribution to growth, accounting for 0.4 percentage points of growth in the Scottish economy in quarter 2 2016.

The industries which has had the greatest contribution to contraction are Construction and Electricity & Gas, which both accounted for 0.2 percentage points of contraction.

The closure of Longannet coal-fired power station, estimated to have resulted in a reduction of Scottish GDP of around 0.2 percentage points alone, has been marked as a one-off closure which will not have an ongoing impact on the growth of the Scottish economy.

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