The fall in the construction sector shows “just how economically damaging the Chancellor’s decision to slash Scotland’s capital budget” have been, Finance Secretary John Swinney told MSPs.

Mr Swinney was leading a Scottish government debate on Tuesday entitled "Actions to deliver sustainable economic growth".

The finance secretary said "output in the production and service sectors - which account for 90% of Scottish economic output - continued to expand".

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"Had we been able to maintain support and investment in construction, recession could have been avoided" he added.

He used the debate to repeat calls for greater capital spending to allow so-called "shovel-ready" infrastructure projects to proceed, arguing this will stimulate economic growth and boost jobs.

Scottish Labour spokesperson for finance, employment and sustainable growth Ken Macintosh said "We are in the midst of a double dip recession yet the SNP's motion asks us to support the Scottish government's approach to economic policy, to accept apparently and I quote the direct action they are taking to tackle unemployment and enhance economic confidence and of course to point the finger of responsibility solely at Westminster to provide the remedy for our economic distress."

The government's motion was passed at decision time.

(H)