Q4 2014 and Q1 2015 Nowcasts

Today (2nd February 2015) we release our first GDP nowcast estimates for 2015 Q1 and new estimates for 2014 Q4 [1].

Headlines:

  • 2014Q4 GDP growth in Scotland, at an annualised rate, is nowcast to be 2.59%, the quarterly change is nowcast to be 0.6%
  • 2015Q1 GDP growth in Scotland, at an annualised rate, is nowcast to be 2.83%, the quarterly change is nowcast to be 0.7%

This estimate for 2014 Q4 is lower than both of our two previous estimates for this quarter (which at an annualised rate were 2.76% and 2.81% in December and January respectively). Our first estimate for Q1 2015 shows a very modest pick up in growth from our Q4 growth nowcast.

The latest GVA figures – published on the 21st January – reported Scottish growth in Q1 and Q2 of 2014 as 0.98% and 1.1% respectively, with the data for 2014 Q3 showing growth of 0.6%.

Our only nowcast for Q3 2014 suggested that growth slowed down in Scotland in this quarter (with our point estimate of 0.77% produced in November), which is consistent with the newly released official data. In combination with all of our nowcasts for Q4 2014 released to date, this suggests that growth in the Scottish economy slowed down through to the end of 2014.

While our first nowcast for 2015 suggest that growth picked up a little at the start of 2015, we are still estimating that growth in the Scottish economy is fairly modest at the moment.

In terms of new information received this month, and included in our estimates, examples include:

  • Bank of Scotland PMI Scotland [2] was essentially unchanged between November and December 2014, down from the highs of the first half of the year and at its value lowest since Q1 2013, but still showing some growth.
  • For other regions of the UK, PMI dropped significantly for example in the South East of England region PMI fell from 60.28 in November to 56.34 in December. Similar falls were observed in other regions of the UK, all showing growth but down from the previous month. Northern Ireland was the only exception with PMI falling from 52.65 in November to 49.79 in December, suggesting a decline in economic activity.
  • Global and Eurozone level PMI continued to reflect a slowing in economic activity relative to earlier in 2014.
  • The GfK Scotland Consumer Confidence survey showed that consumer confidence in December 2014 was hovering around its average for 2014, and slightly up on data for October and November 2014.
  • The claimant count measure of unemployment in Scotland hit a 2014 low of 3.1% in December.

For details of how these, and other “live” data on Scottish economic activity are used to construct “nowcasts”, see the Methodology page.

[1] Note as explained in the methodological paper (here), we nowcast gross value addded (GVA) rather than gross domestic product (GDP), because this is the regional equivalent of GDP which is produced, but we refer here to GDP for intuitive ease.

[2] Bank of Scotland PMI Scotland in October 2014 are reported by Lloyds Banking Group here.

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