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%).
Last month saw the release of official data on the performance of the Scottish economy in the 3rd quarter of 2017, and confirmed weak headline growth of 0.15%. This month we’ve run our nowcasting model to provide our estimates of economic growth in the Scottish economy in the final quarter of 2017 (2017 Q4) and our first estimates of growth in the current quarter (2018 Q1). We will receive official estimates of growth in 2017 Q4 in a couple of months.
Our latest nowcasts for:
- GVA growth in 2017 Q4 is 0.31% which, at an annual rate, is 1.25%. This is down a bit from our last estimate at the start of January (which was 1.42%).
- GVA growth in 2018 Q1 is 0.35% which, at an annual rate, is 1.40%. This is our first nowcast for this quarter.
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.
At the start of a big week of news with the Scottish Budget and the first forecasts by the Scottish Fiscal Commission, we’ve run our nowcasting model with the latest official and survey data to estimate current rates of growth in Scotland.
Our model suggest that the disappointing – and well below trend – levels of economic activity experienced over the past couple of years appears to be continuing.
Specifically, our model estimates that:
- GVA growth in 2017Q3 is 0.38% which, at an annual rate, is 1.51%. This is up slightly on last month’s estimate.
- GVA growth in 2017Q4 is 0.35% which, at an annual rate, is 1.40%. This is essentially unchanged from our estimate last month.
FAI nowcasts and official Scottish Government GDP statistics
The chart above shows how our nowcasts since the start of 2014 have performed relative to the first release of Gross Value Added (GVA) from the Scottish Government over this period of twelve quarters (recall that in line with standard practice GVA data are revised in light of additional data being received).
One interesting feature is that our average nowcast over this period is close (+0.45%) to the average initial release of GVA (+0.37%) as indicated by the dashed lines.
The latest Fraser Economic Commentary is released tomorrow, with new forecasts for the Scottish economy through to 2020.
Later on this week the draft Scottish Budget is released, alongside which the Scottish Fiscal Commission will release their first forecasts of Scottish economic growth and the devolved taxes. With weak economic growth in recent times (just 0.1% over the 3-months to June, and over the year around one-third that of the UK) it will be interesting to see the extent to which the Scottish Fiscal Commission foresee this continuing.
It will also be interesting to see what new measures and initiatives are announced in the Budget to help boost the Scottish economy.