March 2015 Nowcasts

Today (2nd March 2015) we release our second GDP nowcast estimates for 2015 Q1 and additional estimates for 2014 Q4 [1].

Headlines:

  • 2015Q1 GDP growth in Scotland, at an annualised rate, is nowcast to be 2.21%, the quarterly change is nowcast to be 0.55%
  • 2014Q4 GDP growth in Scotland, at an annualised rate, is nowcast to be 2.65%, the quarterly change is nowcast to be 0.66%

This estimate for 2014 Q4 is similar to that obtained last month (recall that was: 0.6% or annualised at 2.59%), and still lower than our first two estimates for this quarter (which at an annualised rate were 2.75% and 2.81% in December and January respectively).

Our first estimate for 2015 Q1 – released 1st February – showed a very modest pick up in growth relative to our Q4 growth nowcast, however our second nowcast for 2015 Q1 suggests that that modest uptick in growth has disappeared and, while we are still nowcasting growth in Scotland in 2015 Q1, this is the slowest growth estimate we have obtained since commencing this project late last year.

The latest GVA figures – published on the 21st January – reported Scottish growth in Q1 and Q2 of 2014 as 1.0% and 1.1% respectively, with the data for 2014 Q3 – released in January 2015 – showing growth of 0.6%. Following the release of the official GVA estimates in January we obtained some verification of the pattern of a slowing economy through to the end of 2014 demonstrated in our nowcast. Our latest nowcast suggests that this slowing in the rate of growth continued into 2015.

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

    • Bank of Scotland PMI Scotland [2] dropped significantly in Jan 2015, and was no longer showing growth in economic activity.
    • Northern Ireland PMI also showed continuing decline in economic activity, it had fallen from 52.65 in November to 49.79 in December, and the latest value is 47.99 in January 2015. This suggests an ongoing decline in economic activity in the region.
    • For other regions of the UK, PMI showed signs of recovery from their dip in December 2015, and all regions other than Scotland and Northern Ireland showed economic growth in January 2015 based on PMI.
    • The GfK Scotland Consumer Confidence survey showed that consumer confidence in January 2015 was broadly similar to levels observed in November and December 2014.
    • The claimant count measure of unemployment in Scotland decreased slightly to 3.0% in January.

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 added (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 are reported by Lloyds Banking Group here.

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