Scotland’s economy grew by 16% in the third quarter of this year after coronavirus lockdown measures were eased.
Data for the period July to September puts GDP growth in Scotland marginally above the 15.5% rise seen in the UK as a whole over the same period.
But since then, tougher restrictions have been imposed across much of Scotland, with 11 council areas under the strictest Level 4 measures for a period.
Economy Secretary Fiona Hyslop MSP has also warned Brexit will have an impact on the economy, with the transition period as the UK leaves the European Union due to end on December 31.
Hyslop said the coronavirus pandemic has meant “businesses across Scotland have faced considerable challenges this year”, but ministers have “worked hard to provide critical support at every stage”.
She said: “On top of £2.3bn support announced at the start of the pandemic, we have provided almost £1.2bn in economic recovery funds and £570m in our recent packages of business support.
And she warned of the dangers of a no deal Brexit. “This would be the worst of all possible outcomes and would result in the imposition of damaging trade tariffs at a time when we are already focused on tackling a pandemic and a recession.”
The GDP figures show that compared to the period July to September 2019, economic growth in Scotland was down by 9.5%.
Output in almost all industries fell in the second quarter of this year, the period covering April to June when Scotland was in lockdown.
But in July to September, the services sector – which makes up the largest part of Scotland’s economy – grew by 13.8%, production was up 18.6%, and the construction sector saw growth of 52%.
When compared to the same quarter in 2019 however, the services sector had shrunk by 10.2%, production was 4.8% lower, and the construction sector saw a decline of 14.1%.
CBI Scotland director Tracy Black said: “Economic growth bounced back in Q3 2020 following the easing of lockdown measures, but the Scottish economy remained nearly 10% smaller than it was at the end of 2019.
“With Scotland entering back into a rolling cycle of tiered restrictions in the autumn, we’re likely to see the recovery taking a step back in Q4.
“Hospitality, retail and tourism firms have been amongst the most severely impacted by the pandemic, and the second hit caused by re-intensifying restrictions may prove too much for some to bear.
“While recent employment figures for Scotland were encouraging relative to the rest of the UK, the labour market remains fragile and fear of increased job losses over the winter remains a live concern.”
Howard Archer of economic forecaster EY ITEM Club said on UK economic prospects: “The EY ITEM Club’s latest forecast sees 6.2% GDP growth in 2021 with the economy benefitting from COVID-19 vaccine developments and assumes the UK and EU will avoid a no-deal outcome at the end of 2020.
“Even so, there is expected to be some limiting impact on trade and growth in 2021 from the changed relationship with the EU as the UK will no longer have access to the Single Market and Customs Union.”
But he added: “Should the UK and the EU not reach a free trade agreement over the coming days and trade between the UK and the EU takes place under World Trade Organization rules from 1 January 2021, the EY ITEM Club believes that growth in 2021, at least, will be significantly affected.
“In this scenario, the EY ITEM Club forecasts GDP growth at 5.0% in 2021 and 3.5% in 2022.”