Today (31st August) we release our latest set of nowcasts of the Scottish economy; these are our revised estimate of the growth in 2015 Q2 and our second estimate for 2015 Q3 [1].

Headlines:

• 2015 Q3 GDP growth in Scotland, at an annualised rate, is nowcast to be 1.99%, the quarterly change is nowcast to be 0.49%
• 2015 Q2 GDP growth in Scotland, at an annualised rate, is nowcast to be 2.13%, the quarterly change is nowcast to be 0.53%

These represent very, very, slight downward revisions to our previous estimate for 2015 Q2 and 2015 Q3.

As we pointed out in our August 2015 nowcast post our nowcasts are suggesting that growth in Scotland is at its long-term growth rate. Given the contractions in the Scottish economy through the Great Recession, one might reasonably be expecting above trend growth at this stage in the business cycle, but nothing that we are seeing in the data or our nowcasts suggests that this is the case.

The most recent ‘State of the Economy’ report by the Scottish Government’s Chief Economist released on 21st August reports the consensus forecast of growth in the Scottish economy for 2015 as 2.4%. Based on our nowcasts for the year so far, this seems to us to be a little optimistic, with growth of around 2% seeming more likely as we head towards the fourth quarter. The key factors identified by the Chief Economist as central to the path of growth in the Scottish economy are the same as those we identified in our August 2015 nowcast post, namely: economic activity in the rest of the UK, external factors (e.g. Eurozone), and oil price impacts. So while we agree on the commentary, we feel that the consensus of 2.4% growth in Scotland this year is likely to prove to be too optimistic.

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.