SCOTLAND’s economy grew at a higher rate than the UK in the second quarter of this year, according to a new report.

Change in gross domestic product (GDP) is the main indicator of economic growth and figures from Scotland’s chief statistician yesterday showed Scottish GDP grew by 0.5% between April and June – a marginal increase on 0.4% the previous quarter – while the UK economy grew 0.4% in Q2.

Over the year compared to the second quarter of 2017, the Scottish economy has grown by 1.7%, while the equivalent growth for the UK as a whole was 1.3%.

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Output in the construction sector was up 1.8%, production by 0.6% and the services sector by 0.4%, while agriculture fell by 1.2%.

Scottish economic growth for the first half of 2018 at 0.8% is higher than the 0.7% growth forecast the Scottish Fiscal Commission projected for the whole of 2018.

The figures do not include offshore oil and gas output.

Finance Secretary Derek Mackay, commented: “These are welcome figures which show that Scottish growth is both pulling ahead of the UK, and outperforming the official growth forecast.

“The Scottish Government is focused on building on the country’s strong economic foundations, supporting businesses to stimulate growth jobs and investment.

“Our Programme for Government includes an ambitious package of measures to ensure we are delivering for the economy of today and ready to seize the opportunities of the future.

“With an unemployment rate of 4.1% and a higher employment rate for women and young people compared to the UK, confidence remains high in our labour market.

“The Royal Bank of Scotland PMI for August also shows private sector output at a four-year high.

“However, these statistics simply reinforce the urgent need to avoid the looming damage of Brexit, which threatens to undo much of the positive work we are doing to strengthen our economy.”

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: “It’s fantastic to see Scotland’s economy growing despite some of the uncertainty surrounding the broader trading environment.

“Over the year, we’ve seen Scotland outpace the UK, with GDP increasing by 1.7%, compared to the UK’s 1.3%.

“Growth was driven by a range of industries, including distribution, hotels and catering, manufacturing, and business services and finance.

“It’s also excellent to see our construction sector, which was particularly challenged by the adverse weather in the first quarter of the year, return to growth rapidly.

“These recent statistics suggest growth of 1.8% this quarter, higher than the 0.9% observed across the UK as a whole.”

Cameron added: “It is testament to the resilience and innovation of our businesses that Scotland has outpaced the UK this quarter, however, this is certainly no time to be complacent.

“Scottish Chambers of Commerce, and our business members, look to the UK’s respective governments to continue to reform policy to ensure that business has the best chance to capitalise on this recent growth and further strengthen our economy.”

David Mundell, the UK Government’s Scottish Secretary, said: “It is welcome news that Scotland’s economy continues to grow.”

Ireland’s economy also performed well according to official figures, exceeding analysts’ expectations for Q2 with a 2.5% surge in GDP.

Poland posted a 4% increase in Q2 GDP, while Norway saw a 1.5% rise and Denmark just 0.1%

Economist John McLaren said: “Scotland continues to perform relatively well in 2018.

“It is particularly welcome to see that much of this growth has returned to the ‘active’ side of the economy, including manufacturing and most private sector services.”