October Nowcasts

Slightly later than usual, we are releasing the latest results from our Nowcasting of the Scottish economy. These results relate to Q2 and Q3 of 2016. Official estimate for 2016 Q2 will be released next week, and we will preview these in more detail early next week.

In the meantime, the results from our model are as follows:

– Our nowcast for GVA growth in 2016 Q2  is 0.31% which, at an annual rate, is 1.24%. This is slightly up on our last nowcast

– Our nowcast for GVA growth in 2016 Q3 is 0.38% which, at an annual rate, is 1.54%. This is also up slightly from the last nowcast.

Given that this is the final nowcast for Q2 which we will release, it is perhaps worth reviewing the 6 nowcasts that we have for this quarter, these are as follows:

1st 2nd 3rd 4th 5th 6th
Q 0.37% 0.36% 0.38% 0.29% 0.26% 0.31%
Annualised 1.49% 1.44% 1.52% 1.17% 1.01% 1.24%

What should be clear from these results is that as soon as our model incorporated data which related to Q2 itself (the 4th nowcast), the nowcast estimate dropped significantly.

These model results suggest growth in Q2 of around 0.3%. Given that, as we have already said elsewhere, the closure of the Longannet coal fired power station at the end of Q1 is likely to knock anything up to 0.4% off of GDP, it is likely that the Scottish economy contracted in Q2. This is a ‘levels’ adjustment, and our results suggest that the Scottish economy otherwise grew in Q2, albeit rather slowly.

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