Scotland's economy stands still

Bad weather hit many businesses in the first three months of the year

There was no growth in Scotland's economy in the first quarter of this year, according to official figures.

Gross Domestic Product (GDP) remained at the same level as the last three months of 2009, but fell by 3.5% over the year to the end of March.

The UK economy as a whole grew by 0.3% in the first three months of this year.

The Scottish government said Scotland was later into the recession than the rest of the UK and there was a lagging effect in terms of recovery.

Scotland emerged from recession in the final quarter of last year with an increase of just 0.3%.

Commenting on the latest statistics, Finance Secretary John Swinney said: "It is now confirmed by these new figures that the recession was shallower north of the Border.

"Clearly Scotland's different economic cycle and stronger past performance means that there is a lagging effect in terms of recovery and the severe winter weather will undoubtedly have impacted on key parts of the economy at the beginning of the year."

Over the year the construction sector was hit the hardest hit, but in the first three months of the year it grew by 2.8%.

The service sector, which fell by 2.4% in the last year, continued to decline by 0.2% in the first quarter.

Derek Brownlee, Conservative finance spokesman, said: "These figures confirm that the recovery in Scotland is at an earlier and more fragile stage than elsewhere in the UK, and emphasise the need for both the UK and Scottish governments to work together to help the private sector create new jobs."

Liberal Democrat finance spokesman Jeremy Purvis added: "The fact is there is now a chasm between SNP rhetoric and the lack of any meaningful economic policy from their government."

Meanwhile, Labour said the figures showed Scotland's economy was "stagnant" under the SNP, accusing them of making poor choices on the economy.

The Scottish Building Federation welcomed some positive signs for the sector.

Chief executive Michael Levack said: "If these first tentative signs are to have any chance of translating into a sustainable recovery, public capital investment budgets will need to be protected and more will need to be done to inject life back into private sector housebuilding and commercial and industrial construction work."

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said the new data shows the recovery remains fragile, and that it was good news the economy did not contract at the start of the year.

She said: "Some sectors of our economy are expecting tougher trading conditions over the summer.

"Next year, we will also have to contend with the rise in VAT and public spending cuts both at a Scottish and UK level."

Ms Cameron commented that every pound of taxpayer money should be invested in helping the private sector to drive the economy forward.

She said: "This is particularly true in Scotland where our economy has for too long been over-reliant on the public sector for growth."