We’ve once again run our nowcasting model on the latest data on Scottish economy to provide estimates of current and recent growth in the economy.
Our model produces the following estimates of growth in the Scottish economy:
• Our nowcast for GVA growth in 2018 Q1 is 0.28% which, at an annual rate, is 1.13%
• Our nowcast for GVA growth in 2018 Q2 is 0.32% which, at an annual rate, is 1.29%
These represent our first estimate for growth in 2018 Q2, and an update on our previous estimate for 2018 Q1 – which last month was estimated to be 0.36% (or annualised at 1.43%).
Thus our model has revised down our estimate of growth in the first three months of 2018. With the episode of poor weather which Scotland experienced in this period, key economic indicators may be a little more volatile in Q1 2018.
Nevertheless, recent Retail Sales data shows that the volume and value of retail sales in Scotland grew 0.5% in the first three months of 2018 (this was in contrast to Great Britain where volumes of retail sales were down 0.5% and value of retails sales was flat).
Since our last set of nowcasts, we have also received new official data on the performance of the Scottish economy in the final three months of 2017.
Last month we estimated that growth in 2017 Q4 was 0.32% (which at an annual rate, is 1.28%).
The official estimates of GDP growth from Scottish Government put growth in the final three months of 2017 at 0.31%.
Well done to our model!
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.