Tracking local labour market performance since the Great Recession

On Friday, we published the latest edition of our new quarterly publication – Labour Market Trends – with our colleagues in the Scottish Centre for Employment Research.

The aim of the report is to highlight recent developments in the Scottish labour market and to bring to the fore some of the structural issues that underpin long-term trends in employment, unemployment and activity levels in Scotland.

This quarter we highlight a number of important issues, including the recent rise in inactivity and the uncertainty surrounding interpreting changes in the key headline employment and unemployment data for Scotland.

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What will this week’s labour market data tell us about the outlook for Scottish income tax revenues?

In a little over six weeks, the transfer of Scotland’s new income tax powers will be complete.

With this in mind, each new release of economic or labour market data will now have even greater significance than before. Crucially they will give us an early – albeit imperfect – indicator of whether the Scottish economy is likely to be generating the revenues policymakers are hoping for.

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Scottish Economy Nowcasts for February


Grant Allan & Stuart McIntyre
http://www.nowcastingscotland.com 
Fraser of Allander Institute, University of Strathclyde


As usual for the start of the month, we release the results from our nowcasting model of the Scottish economy.

Since our last update, we have received data on the performance of the Scottish economy in Q3 of 2016, indicating growth of 0.2%.

These data suggest the continuation two worrying trends, firstly Scotland lagging behind growth in the rest of the UK, and secondly, Scotland underperforming relative to its own long term trend rate of growth. We commented in greater detail on these issues here.

This month, our model estimates:

  • GVA growth in 2016 Q4 of 0.38% which, at an annual rate, is 1.51% (this is down ever so slightly from our last release)
  • GVA growth in 2017 Q1 is 0.40% which, at an annual rate, is 1.59%. This is our first nowcast for 2017 Q1, and is based only on data to 2016 Q4.

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Boosting the Scottish Government’s Budget?

Yesterday, the Scottish Government announced a ‘Budget boost for economy and public services’. This included an additional £220 million of spending on top of plans set out December’s Draft Budget.

Details on the various sources of this ‘new money’ are as yet unclear and clearly there will be ongoing debates about whether or not it is too much or too little. But setting the political choices aside, yesterday’s announcement was interesting in its own right. It also raises some questions about the transparency of the budget process. This blog poses some issues that might help enlighten the debate as the Budget Bill continues its progress through Parliament.

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