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Downturn hits Scottish construction

The construction sector in Scotland has performed worse than any other part of the country’s economy as the effects of the credit crunch continue to be felt.

Official figures show that Scotland’s overall economy shrunk by 2.4 per cent during the first quarter of 2009. However, building and maintenance output shrank a massive 6.6 per cent over the first three months of the year.

The figures show the third successive quarterly fall in the country’s gross domestic product, with the year-on-year fall at 1.2 per cent. This is similar to the drop felt by the whole of the UK in the same period.

Scotland’s production sector did not fare much better, falling 5.1 per cent, while its service sector dropped 1.5 per cent.

Though financial services and real estate output fell by more than 4 per cent each in the service sector, public administration, health and education all expanded by nearly 1 per cent.

One of the areas hardest hit by the recession was manufacturing, which saw a 6.3 per cent fall. This drop in output was driven by the chemicals and manmade fibres industry, which fell by nearly 14 per cent.

The Scottish Government said the fall in GDP was “broadly” in line with falls in other advanced economies.

Global economic conditions had stabilised since the first quarter but the signs pointed to a slowing rate of decline rather than a return to growth in the second quarter, it said.