Slightly later than usual, here are our monthly nowcasts of the Scottish economy, covering the first two quarters of 2018.
Our model suggests that:
- GVA growth in 2018 Q1 was 0.29%, or at an annual rate 1.18%
- GVA growth in 2018 Q2 is 0.29%, or at an annual rate 1.16%
Next month the Scottish Government will release official estimates covering the first three months of 2018, against which we can compare our Q1 estimate.
By way of comparison, UK GDP growth in Q1 was only 0.1%. If our nowcasts are correct, this would be substantially weaker than growth in Scotland over the same period.
Similarly, if our nowcasts are accurate, it would also mean that the economy has realised nearly half of the growth that the Scottish Fiscal Commission recently forecast for 2018 as a whole (they estimate growth over the year of 0.7%).
0.3% growth in the first three months of 2018 is nothing to write home about, but it would be better than the UK in the same period, and better than many might be expecting.
Next week the Fraser Economic Commentary, supported by Deloitte, is released. This will contain updated forecasts for the Scottish economy for 2018 and beyond. It will also look in more detail about what the various survey and data releases tell us about the health of the Scottish economy.
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!
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.