This blog reports the latest estimate of economic growth in Scotland from our nowcasting model. Unlike previous blog posts, this one only includes estimates for one quarter rather than two.
The reason for this is that the Scottish Government have now shortened the time between the end of the quarter and the release of data on that quarter.
Data for 2018 Q1 (January – March) were released on 27th June 2018, only 88 days after the end of the quarter.
While this is still a longer lag in the release of the data than that for the UK as a whole, it is much shorter than the previous publication lag for Scottish data of around 115 days.
Improvements in the timeliness of regional economic statistics are to be welcomed, and statisticians in the Scottish Government should be congratulated for their work in this area.
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!
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.