This item was published during the term of a previous administration that ended in April 2007
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Minister responds to GDP estimates
07/08/2002
Scotland remains well placed to overcome the challenges
posed by the current weak global economic environment, Iain
Gray, Minister for Enterprise, Transport and Lifelong
Learning said today.
Mr Gray was speaking at the publication of the
provisional estimates for GDP 2002 quarter one. He said
that the strong economic fundamentals in Scotland and the
rest of the UK - with interest rates and inflation at their
lowest levels for almost forty years and claimant count
unemployment at an historically low level - will provide an
excellent platform for growth when there is a revival in
the global economy.
The Minister also marked the publication of the latest
GDP figures by announcing the re-establishment of the
Manufacturing Steering Group. The reconstituted group will
be tasked with finding out what more can be done to assist
the manufacturing sector in Scotland.
The latest figures show that GDP in Scotland fell by 0.7
percent during that period and that revised figures for the
previous quarter have resulted in a 0.3 percent drop. The
figures also show that nevertheless, GDP rose by 0.7
percent in the four quarters to 2002 quarter one
Commenting on the latest figures, the Minister said:
"These figures are unwelcome and there can be no doubt
that the global economic slowdown has had a major impact on
economic activity in Scotland in both the latter half of
2001 and the first quarter of 2002. Our economy is both
small and open and, as such, will always be susceptible to
global economic movements and global restructuring in major
industries such as that recently experienced in
electronics.
"What is encouraging, however, is that throughout these
difficult times our labour market has remained buoyant.
Employment remains high by historical standards, and both
ILO unemployment and claimant unemployment are at low
levels - the latter close to the lowest for over 25
years.
"However, since taking on my portfolio, I have been made
increasingly aware of concerns over manufacturing following
the global downturn. In the light of these concerns,
reinforced by today's GDP figures, I have decided to
re-establish the Scottish Manufacturing Steering Group.
"The Scottish Manufacturing Steering Group
has provided expert advice in the past in the shape of
Created in Scotland. I am asking them to build on
this valuable work to consider what can be done to lend
further support to the sector.
The Minister continued:
"In certain skills-based sectors Scotland continues to
experience growth. For example in the business and
financial services sector, growth in Scotland remains
strong, outstripping growth in the rest of the UK."
"The Executive is committed to ensuring the long term
strength of the Scottish economy and has implemented
policies that seek to improve Scotland's performance over
the medium to long term.
"I do not underestimate the task we face but there can
be no return to short term fixes. Our strategy is the right
one:drawing upon our own indigenous strengths, developing
our people's skills, and driving success through innovation
we can get Scotland growing."
The main findings of the latest figures are:
- GDP (seasonally adjusted) fell by 0.7 per cent in
2002 Q1. For the UK as a whole GDP rose by 0.2 per
cent.
- In the 4 quarters to 2002 Q1, the increase was 0.7
per cent, compared with the previous 4 quarters (to
2001 Q1). The equivalent UK figure was 1.6 per
cent.
- In the 4 quarters to 2002 Q1, output in the
Scottish service sector grew by 5.7 per cent, compared
with a 9.6 per cent drop in the production sector and a
4.1 per cent drop in construction. The equivalent
figures for the UK were +3.1 per cent (services), -3.7
per cent (production) and +5.6 per cent
(construction).
- In the 4 quarters to 2002 Q1, output in the
Manufacturing sector decreased by 10.6 per cent,
compared with the previous 4 quarters. In 2001 Q4,
output decreased by 4.3 per cent, compared with the
preceding quarter. The equivalent figures for the UK
were -4.2 per cent and -1.3 per cent, respectively.
Data for Scottish GDP for the period up to 2002 Q1
incorporate details of the Index of Production.
All data for 2002 Q1 are provisional and subject to
revision.
Gross Domestic Product (GDP) is a measure of the value
of goods and services produced by residents, before
allowing for depreciation or capital consumption. Net
receipts from interest, profits and dividends abroad are
excluded.
The methodology employed to calculate the Scottish
estimates of GDP growth is consistent with that used by
other National Statistics publications in the calculation
of Gross Value Added (GVA) for the UK and, as such, is
ESA95 (European System of Accounts 1995) compliant. An
article "Quarterly estimation of Gross Domestic Product"
appeared in
Scottish Economic Statistics, published by the
Scottish Executive in February 2000. An additional article
"The Interpretation of the Quarterly GDP for Scotland
Series" was published in the March 2001
Scottish Economic Statistics.
Although it is not possible to isolate and quantify the
effect of economic uncertainties following the events of
September 11th, it is likely that there has been a
significant effect on the level on Scottish GDP.
Manufacturing contributes a fifth of GDP in Scotland.
There are almost 290,000 employee jobs (13% of the
workforce), with an estimated further 150,000 indirect
employee jobs in manufacturing.
Until recently, manufacturing focused on the process of
production. Today, it is more about creating than making.
Manufacturing integrates R&D, design, supply,
production, software, services, distribution, delivery and
aftercare. Successful Scottish manufacturers concentrate on
those parts of the process which add real value.
The Scottish Manufacturing Group was set up by the
former Enterprise Minister, Henry McLeish in 1999 to advise
the Scottish Executive on how best to support Scottish
manufacturing. Members include manufacturers, business
organisations, trade unions and representatives from the
higher education sector. It last met in 1999 to launch its
report,
Created in Scotland.
Created in Scotland lists over 50 initiatives
covering: business environment; knowledge and technology;
science base and its commercialisation; skills and people;
and images and attitudes. Good progress has already been
made on almost all of these initiatives, with some already
having been achieved or completed. For example we have: For
example, we have
:
- Published a comprehensive Science Strategy for
Scotland in August 2001;
- Achieved the target of over 20,000 Modern
Apprenticeships by 2003 a year early; and
- Piloted
Make it in Scotland, a campaign to promote the
image of manufacturing, in Ayrshire, Angus and Glasgow
in 2001-02."