We’ve run our nowcasting model for the Scottish economy again this month, and produced estimates for growth in Q3 and Q4 of 2019.
These estimates use all of the data currently available on a range of hard and soft indicators, including business surveys, labour market statistics, etc.
The latest model estimates are:
- growth in 2019 Q3 of 0.19% which, at an annual rate, is 0.75%
- growth in 2019 Q4 of 0.26 which, at an annual rate, is 1.05%
These are the weakest growth estimates that our model has generated for some time – but we would caution that these estimates are affected by the contraction in GDP realised in Q2.
In turn, that contraction came after faster growth in Q1 as firms prepared for a potential Brexit at the end of March.
Firms, particularly in the manufacturing sector built up their inventories in Q1, and with the UK not exiting the EU at the end of March and with Brexit pushed down the road, firms in Q2 unwound these stockpiles leading to lower levels of activity.
Going forward, growth estimates are forecast to continue on a weak trajectory as long as Brexit uncertainty remains. What happens thereafter, remains highly uncertain.