The fragility of Scotland’s recovery has been put in sharp focus with confirmation that the economy shrank at the end of last year.
Official gross domestic product figures for the last quarter of 2011 showed a 0.1% fall, although GDP had risen 0.5% overall year-on-year.
Construction again bore the brunt with a 2.7% decrease in the three-month period, while the service sector grew 0.2%,
Separate data showed there was no change to manufactured export sales in Q4 2011, but the year as a whole saw a record 4.8% rise.
CBI Scotland director Iain McMillan said the GDP figures made for ”sobering reading” and the plateau in exports was not unexpected.
He said: ”It is important to note that these figures reflect a wider trend witnessed in both the UK and EU economies at this time. Indeed, the economic environment became even more challenging late last year as heightened concerns around the crisis in the euro area eroded business confidence, and this may well have contributed to the fall in GDP.”
Turning to the export statistics, Mr McMillan added: ”Although some industries have been hit especially hard over the period, there is some good news amongst the figures. Increases in engineering and drink exports, for example, appear to suggest that certain sectors are bucking the no-growth trend, and this, at least, is to be welcomed.
Liz Cameron, chief executive of Scottish Chambers of Commerce, said firms had warned that trading conditions were challenging.
She said: ”Our members had told us that business conditions were tough towards the end of 2011 and the confirmation that our economy dipped into negative territory has come as little surprise.
”However, the fact that the contraction was only very marginal, and was significantly better than the overall rate of contraction in the UK economy for the fourth quarter, is welcome news for Scotland.
”According to the latest survey of our members, expectations are that business conditions have improved in the first quarter of 2012, and therefore we believe that the immediate prospect of a double-dip recession is unlikely.”
Mrs Cameron said a stalling of export growth in the latter part of 2011 had been expected but there was evidence that overseas trade was beginning to pick up once more.
She added: ”We had anticipated that the rate of growth in our manufactured exports would ease in the fourth quarter of 2011, particularly as the ongoing crisis in the eurozone has affected many of our key export destinations.
”The news that export growth was flat in the three months to December is probably as good as we might have expected and the evidence from our recent survey of the manufacturing sector indicates that exports may have returned to growth in the early part of this year.”
Photo by Gareth Fuller/PA Wire