July 2015 Nowcasts

Today (1st July) we release our latest set of nowcasts of the Scottish economy; these are our revised estimates of the growth in the current quarter (2015 Q2) and the previous quarter (2015 Q1) [1].

Headlines:

  • 2015 Q2 GDP growth in Scotland, at an annualised rate, is nowcast to be 1.99%, the quarterly change is nowcast to be 0.49%
  • 2015 Q1 GDP growth in Scotland, at an annualised rate, is nowcast to be 1.95%, the quarterly change is nowcast to be 0.48%

Both of these nowcasts have been revised down very slightly compared to those of June 2015, and are consistent with all of our nowcasts for 2015Q1 and Q2. In addition, both of these revised nowcasts are very similar to each other suggesting that the performance of the economy in Q1 and Q2 of 2015 has been broadly the same.

The new information released this morning reaffirms our view that growth is likely to continue to be modest but positive in Scotland through to the middle of 2015.

2015Q3 starts today, and looking forward there are a few things stand out as potentially important for the path of growth in the Scottish economy. First, growth in the overall UK economy in 2015Q1 was slightly higher than initially thought, estimates now put it at 0.4% from the initial estimate of 0.3% (at an annualised rate this equates to growth of 2.9% compared to 2.5%). Second, the ongoing Eurozone crisis, currently focused around Greece, is thought to be a threat to the health of the UK economy and events there are likely to prove important for the short to medium term growth of the UK and Scottish economies. Third, on a positive note, the ONS reported that the disposable income of UK households grew at its fastest rate since 2001– welcome news- but it is also worth noting that in per capita terms, real household disposable income was unchanged in 2015Q1. Fourth, there is a UK Government budget due on 8 July 2015, the contents of which may -and are certainly intended to- alter the path of UK and Scottish economic growth. The countdown to budget day begins…

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] Sole responsibility for the content of the blog post this month rests with Stuart McIntyre, Grant Allan was away.

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