Today (2nd October) 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 1.94%, the quarterly change is nowcast to be 0.48%
• 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 nowcasts represent a slight downward revision for 2015 Q3, and estimates for 2015 Q2 which are basically unchanged from our last update.

We pointed out in our last post that, post-recession, this level of growth was disappointing, and that still remains the case. Some reports released recently affirm that growth in Scotland is middling at this stage, for instance the Bank of Scotland Scottish Business Monitor reporting that on balance more firms are reporting increasing turnover although declines in exports reported in this survey are a cause for concern. On balance, they described expected growth in the Scottish economy through recent months as ‘moderate’. This is a view affirmed by the PMI indices which were released during September. The Bank of Scotland Report on Jobs released in September, focussing more on the labour market dynamics in Scotland, suggests that while job growth is continuing, the rate of job growth is slowing and is lower than elsewhere in the UK.

While we are confident of continued positive growth in the Scottish economy through the third quarter, at or around long term trend levels [2], we reiterate our belief that this represents disappointing performance given the stage of the business cycle we are currently at.

For details of how the data mentioned above, and other “live” data on Scottish economic activity are used to construct our “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] Scotland’s annual average growth in the 30 years to 2007, i.e. pre-crisis, was 2% compared to 2.5% for the UK as a whole, see: http://www.gov.scot/Resource/Doc/919/0119249.pdf