Latest figures from the Scottish Government highlight construction as the main driver of an economy which saw unemployment fall for the sixth quarter in a row.

But Finance Secretary John Swinney is warning that economic recovery could be derailed by Westminster’s plans to cut capital spending by £800m across Scotland next year.

The figures have also puzzled contractors across the rest of the UK who are being squeezed by the harshest public spending cuts for decades.

One leading contractor told the Enquirer: “It’s a bit puzzling when all the talk south of the border is cuts, cuts, cuts while in Scotland public work just goes ahead as normal.

“You have to wonder if the whole thing isn’t just going to come to a shuddering halt.

Swinney said: “After a shorter and shallower recession than the UK as a whole, today’s figures present a strengthening economic picture and show further signs of recovery, built in Scotland and with its foundations in the construction sector and our capital spending programme.

“We have seen strong growth in construction for three consecutive quarters, outperforming the UK as a whole – evidence that we were absolutely right to take decisive and comprehensive action through our Economic Recovery Plan, stimulating investment by bringing forward capital projects and delivering an infrastructure programme worth £3.3 billion in 2010/11.

“This commitment is paying off – as reflected in the strong performance we are seeing in construction, where the number of workforce jobs increased by 23,000 over the year to September, and at a time when our capital budget is being cut by Westminster by £800 million next year, we are bringing forward a £2.5 billion investment programme through the Non-Profit Distributing model.

“Just yesterday Enterprise Minister Jim Mather visited the site of the £5.7 million South East hub initiative in Edinburgh – the first of five hub territories being developed across Scotland.

“Supported by the Scottish Futures Trust and Scottish Government, these projects will bring together different public bodies to deliver greater value for the public purse and deliver around £1 billion of community infrastructure over the next ten years.

“But while today’s figures are welcome, Scotland’s recovery remains at a crucial stage.

“We must continue to bring unemployment down, and the UK Government is wrong to threaten the positive signs we are seeing by cutting the Scottish budget by some £1.3 billion next year – including the massive £800 million cut to our capital budget.

“This underlines the urgent need for Scotland to secure full economic and financial powers so that the Scottish Government and Parliament have all the tools needed to sustain growth, further boost employment and put Scotland on the path to long-term economic success.”