With Scottish GDP data out tomorrow, this blog provides a (very!) quick and brief update on our latest estimates of recent and current Scottish GDP:
- Our nowcast for GVA growth in 2017Q4 is 0.32% which, at an annual rate, is 1.28%
- Our nowcast for GVA growth in 2018Q1 is 0.36% which, at an annual rate, is 1.43%
We will see how close our point estimate is to the data for 2017 Q4 released tomorrow.
Meanwhile, for the interested reader, the chart below summarises the first release, latest release, and average nowcast estimate for Scottish GDP since 2014.
We can see that while our model does not generate estimates with the same volatility as the official GVA series, nevertheless, there is a clear consistency to the trend observed in all three series. We can also see that the revisions which take place to the GDP estimates can be substantial (e.g. Q1 2014, or Q2 2016).
Similarly, as the chart below shows, our average nowcast estimate over this same period is very close to the average initial release estimate for Scottish GDP over this period, suggesting that -on average- our model has been reasonably good at estimating changes in Scottish GDP.
With official estimates of economic growth in Scotland due out next month, we have produced updated estimates of economic growth in Scotland using our nowcasting model for Q4 2017 and Q1 2018.
These estimate that:
- GVA growth in 2017 Q4 is 0.36% which, at an annual rate, is 1.47%
- GVA growth in 2018 Q1 is 0.34% which, at an annual rate, is 1.38%
Relative to our estimates from last month, these suggest a slight improvement in our estimate for Q4 (up from 1.25%), and very little change in our estimate for Q1 2018 (which was 1.4%).
Happy New Year to all our blog readers!
As usual for the start of the month, we’ve put our nowcasting model to work to produce some new estimates of economic growth in Scotland.
Next week, official estimates will be released by the Scottish Government of the growth in the Scottish economy in the third quarter of 2017.
In advance of this, we provide our final estimate for 2017 Q3 growth and an update for 2017 Q4 growth as follows:
- Our nowcast for GVA growth in 2017 Q3 is 0.37% which, at an annual rate, is 1.50%. This is up a little from our estimate last month.
- Our nowcast for GVA growth in 2017 Q4 is 0.35% which, at an annual rate, is 1.42%. This is essentially the same as reported last month.
With new official data released next week we will be able to evaluate the accuracy of our nowcasting model against these new data. Recall that we did some comparisons between our nowcast estimates and official data in last month’s blog.
The latest Fraser Economic Commentary, released in December 2017, provides an in-depth discussion of the outlook for the Scottish economy.
Grant Allan & Stuart McIntyre
Fraser of Allander Institute, University of Strathclyde
In this blog we provide an update from our nowcasting model of the Scottish economy. This includes an updated estimate for Q3 of 2017 alongside our first nowcast for 2017 Q4.
Our model estimates:
- GVA growth in 2017 Q3 is 0.32% which, at an annual rate, is 1.28%. On a quarterly growth basis, this is down over percentage points on our estimate of growth in Q3 from last month.
- GVA growth in 2017 Q4 is 0.34% which, at an annual rate, is 1.37%
Our nowcast model results are summarised over time in the figure below. The period of relatively flat growth through much of 2016 is clearly evident. As we have observed before, our model tends to produce estimates which are less volatile than the first release of GVA but which capture the trend rather well as the figure below illustrates.
Economic growth in Scotland has been sluggish for some time, reflected in the official data and in our nowcast estimates; this makes the downward revision to our estimate for 2017 Q3 this quarter (of 0.1 percentage points; from 0.43% last month to 0.32% this month) a particular concern.
This downward revision is driven by the continued weakness of a range of indicators of the health of the Scottish economy. While the labour market remains robust, elsewhere in the economy there are signs of substantial weakening. Not least in retail sales where growth was flat in the third quarter of 2017 was flat (0.0% growth). Other indicators of economic activity, such as business investment, are a further cause for concern for the short-term outlook for Scottish growth.
The next Fraser Economic Commentary will be published in December, and we will delve into these trends in more detail there.