With official estimates of GDP growth in Scotland in Q3 2019 due to be released later this month, we’ve updated our nowcasts for the Scottish economy for Q3 and Q4 2019.
These estimates put growth in Scotland:
- For 2019 Q3 growth at 0.21% which, at an annual rate, is 0.83%
- For 2019 Q4 GVA growth is 0.25% which, at an annual rate, is 0.99%
These estimates represent similar estimates to those released last month – and a continuation of the sustained period of weak growth experienced through much of the past few years.
In the last set of official estimates of growth in Scotland, growth in the year to Q2 was 0.6%, included in this estimate was the contraction in GDP in Q2 itself.
The positive growth estimate for Q3 implies that Scotland will not enter recession in 2019.
Taking our estimates for Q3 and Q4 (above) together with the official estimates for 2019 Q1 and Q2, implies economic growth in Scotland of 0.7% between 2019 Q4 and 2018 Q4, or on a 4 quarter on 4 quarter basis, growth is estimated to be 0.8% in 2019.
The latest nowcasts from our Scottish nowcasting model cover the 3rd quarter of 2019.
Our model suggest that:
- Growth in Q3 is 0.28% which, at an annual rate, is 1.13%
This growth estimate comes after the release of official estimates of economic growth in 2019 Q2 from the Scottish Government which showed that the Scottish economy contracted by -0.3% in Q2. This was slightly more than the UK as a whole, which contracted by -0.2%.
However the Scottish economy did grow 0.7% relative the the same quarter the year before, albeit again this was weaker than the UK as a whole, which expanded 1.2%.
This post reports a series of nowcasts which have yet been reported on the blog. Official estimates for Q2 have now been released by the Scottish Government showing a contraction of -0.3%.
For Q3 our current estimates are:
- September estimate: Growth in 2019 Q3 (July – September) of 0.30% which, at an annual rate, is 1.21%
- August estimate: growth of 0.30% in 2019 Q3 which, at an annual rate is 1.21%.
Shortly we will produce new estimates incorporating the new Q2 growth data from the Scottish Government.
It is also worth noting that an alternative set of nowcasts is available covering all NUTS1 regions of the UK, also produced by researchers at the Fraser of Allander Institute. These estimates are available at: www.escoe.ac.uk/regionalnowcasting.
With 29th of March now behind us, but with the uncertainty remaining rather than resolved, we have produced a new nowcast for the Scottish economy for Q1 2019.
Since our last nowcast in early March we have received official estimates of GDP growth in 2018 Q4. These place growth in Q4 at +0.3%, slightly ahead of UK growth in Q4 of 0.2%.
This is in line with our last nowcast for Q4 2018 which put growth at 0.29%.
Services growth again outpaced the overall economy with growth of 0.5% in Q4 of 2018, but production sector growth was down -0.9% for the second quarter in a row.
These latest official data put overall growth in Scotland in 2018 at 1.4%, still significantly below long-run trend growth.
Turning to growth in Q1 2019, our latest estimate puts growth at 0.31%, or at an annualised rate 1.26%.
One reason for this is that consumer and business confidence remains low.
We will set out some scenarios for different Brexit scenarios in the next Fraser Economic Commentary.
These will consider how any resolution to the political and economic uncertainty around Brexit – and any likely policy response – might impact on economic outcomes over the forecast horizon.
We will continue to produce monthly nowcasts to seek to identify any movements in quarterly growth rates.
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