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Scottish GDP slumped by a fifth after lockdown

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The coronavirus lockdown has put many businesses under pressure

The Scottish economy suffered a 19.4% drop in output in the second quarter of this year, according to the latest figures.

The first official estimate for April, May and June is close to the provisional one issued last month.

The GDP figures highlight the impact of the coronavirus lockdown which began at the end of March.

The UK economy shrank by 20.4% over the same period.

It's hard to grasp the hit to the economy from a fifth of output disappearing in only three months. There's no modern precedent. But that's what we've been through.

Perhaps the only way to make sense of it is by comparison with others. Scotland did only slightly less badly than the UK as a whole - a single quarter decline of 19.4% against 20.4%.

That's not much consolation, as the UK did far worse than comparable, developed nations.

The next worst output figures were for France, down 13.8%, and Italy, falling 12.4% in April, May and June.

Both had faced significantly sharper falls in output in the first quarter of 2020, because lockdown measures began earlier there than the UK.

However, the combined effect over the first half of the year still leaves the UK as worst affected of major industrial nations.

A forecast published by the Organisation of Economic Co-operation and Development (OECD), the richer country club, continues the theme: UK decline for the whole of 2020 of 10.1%, while world GDP looks like falling 4.5%, and the G20 larger nations by 4.1%.

The rebound forecast for next year is bigger for the UK, at 7.6% growth, but not enough to make up lost ground in 2020.

If all that looks bad, spare a thought for South Africa. With harsh lockdown measures and despite a good farm harvest, it announced a second quarter contraction of 51%.

Largest fall

The latest Scottish figures show that all industries contracted over the period from April to June, with construction showing the largest fall at 41.5%.

The next largest fall was in the distribution, hotels and catering sector, at 33.9%.

In the first quarter of the year, covering January to the end of March, Scottish GDP shrank by 2.5%, reflecting the move at the end of that period to restrict economic activity as a coronavirus precaution.

Andrew McRae, from the Federation of Small Businesses' Scotland, said: "By forcing thousands of businesses to shut up shop, we slammed the handbrake on the Scottish economy. These unsurprising statistics show the extent of the slowdown.

"Those firms that did the right thing now need the support policymakers to see them through to the recovery. That likely means no new pressures on business and ongoing support for firms still facing trade restrictions."