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Retail sales 'worst since 2006' Recession fears as economy slows
(1 day later)
Scotland's high street shops have recorded their weakest sales performance for more than two years. The Scottish economy grew by 0.1% in the second quarter of this year, according to newly-released figures.
Statistics published by the Scottish Government said GDP had risen by that level between April and June - compared with a 0.3% rise in the first quarter.
Finance Secretary John Swinney said economic events around the world had already moved on considerably since the period covered by the statistics.
Economic expert Prof David Bell said Scotland may already be in recession.
The figures showed Scotland's economy faired marginally better than in the UK as a whole, where growth stalled for the same period.
The modest growth in GDP reflected an increase in service and production sectors but a 0.4% decline in the construction industry.
The data showed the financial sector - following a sharp 8.4% fall at the start of the year - fell again by 0.1%. Catering and hotels also dipped by 0.1%.
However, more recent economic evidence suggested Scotland could now be in a bleaker position.
We now need urgent measures to get the economy moving John SwinneyFinance secretary
On Tuesday, CBI Scotland highlighted a sharp drop in orders for manufactured goods in the last three months.
And Scotland's high street shops have recorded their weakest sales performance for more than two years.
Figures from the Scottish Retail Consortium showed no growth on the high street last month compared with the same time last year.
Like-for-like sales in September showed no increase at all on the last year and non-food sales showed a fall, the Scottish Retail Consortium (SRC) said.Like-for-like sales in September showed no increase at all on the last year and non-food sales showed a fall, the Scottish Retail Consortium (SRC) said.
It was the worst result since March 2006 and showed weakening consumer confidence and the squeeze on household budgets, the consortium claimed.It was the worst result since March 2006 and showed weakening consumer confidence and the squeeze on household budgets, the consortium claimed.
However, the figures for Scotland were better than elsewhere in the UK. Westminster calls
As we enter the all-important run up to Christmas, Scottish retailers will be nervously hoping to avoid negative results next month Fiona MoriartyScottish Retail Consortium Mr Swinney said the GDP figures showed that Scotland's economy was still growing.
The report said that when sales from new shops were taken into account, the Scottish figures were 4.6% higher than last September. "But growth is clearly slowing which is concerning and undoubtedly reflects the impact of the global downturn on Scotland's real economy," he said.
But once inflation is accounted for, sales in September were "significantly" lower than a year ago. "Though we have areas of real strengths - like a strong, skilled labour market and vibrant energy and engineering sectors - we now need urgent measures to get the economy moving."
All of the growth in September came from food sales, reflecting higher commodity prices. He repeated calls on Westminster to allow access to unused money.
Despite heavy discounting, clothing, footwear and other non-food sales were all down. He added: "We want to see further and deep cuts in interest rates and lower tax on energy bills over this winter."
But the picture was even gloomier for the UK as a whole, where sales fell 1.5% below their September 2007 level. Prof Bell, of Stirling University, said the Monetary Policy Committee should have cut interest rates sooner and more gradually, suggesting that another 0.5% cut was probably needed.
'More pronounced' David Lonsdale, of the Confederation of British Industry, said the Scottish Government could make changes to support the economy, including improvements to the planning system and ensuring greater private sector involvement in the delivery of public services.
SRC director Fiona Moriarty said: "The zero growth in Scottish retail sales in September was the weakest performance for two-and-a-half years. Liz Cameron, chief executive of Scottish Chambers of Commerce, said: "These second quarter GDP figures tally with the messages we have been receiving from businesses right across Scotland and demonstrate that the pressures on the construction sector, which have been evident since early this year, are bringing our overall economic growth levels right down to the wire."
"As we enter the all-important run up to Christmas, Scottish retailers will be nervously hoping to avoid negative results next month."
Ms Moriarty went on: "Despite trading marginally better than the rest of the UK, conditions are still very tough for Scottish retailers with the only growth in September experienced in the food sector.
"Despite heavy discounting, the non-food sector shows like-for-like sales 3.9% down on last year.
"This decrease has been evident since the summer but the decline has been getting steadily more pronounced in recent months and will worry many retailers as Christmas approaches."