The Scottish economy slowed in the final quarter of 2015 with confidence in international markets and a drop in the oil industry constraining growth, according to economic researchers.
The latest Scottish Business Monitor from the University of Strathclyde’s Fraser of Allander Institute (FAI) found new business levels eased during the three months to the end of November 2015 with an overall net balance of +3% compared to +17% in the previous quarter.
Export activity fell, while expectations for turnover in the next six months have also fallen.
A rise in interest rates in the US, a slowdown in Chinese growth early this year and the low oil price were highlighted as key factors in the slowdown.
However, the FAI said the slowdown in the rate of recovery will end and that the pace of the recovery will improve in the coming year.
Grant Allan, FAI deputy director, said: “Growth in the Scottish economy slowed in the final quarter of 2015, while expectations of growth have remained broadly positive.
“We await the GDP figures for the third quarter of 2015, and following only slight growth of 0.1% in Q2, we will then learn whether growth through last year will be at the moderate levels forecast earlier in the year.
“Internationally, the US Federal Reserve’s decision to increase interest rates during December 2015 suggests their confidence in the embeddedness of recovery. However, it remains to be seen how the US economy – a vital trading partner for Scottish non-UK exports – responds to this decision.
“Concerns about a slowdown in Chinese growth as we begin 2016 suggests ongoing weakness in the global economy.
“This feeds back to Scottish activity both through lower exports and a low price of oil affecting activity across the country, and particularly in the north east of Scotland.”
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