Early last month HMRC published new regional trade statistics for 2017 by region and nation of the UK.
In this blog, we look at these data and highlight some interesting trends and issues.
Author: Fraser of Allander Institute
Today’s GDP data shows the Scottish economy grew by 0.3% in the last three months of 2017, bringing headline growth in 2017 in at 1.1%. This blog unpicks some of these numbers in more detail and explains the two different measures used to describe annual GDP growth.
In summary:
- These data show that the Scottish economy grew by 0.3% in Q4 2017 (compared to 0.4% for the UK as a whole).
- This makes growth relative to the same quarter the year before 1.1% (compared to 1.4% for the UK as a whole).
- Or on a 4Q-on-4Q basis growth in 2017 in Scotland was 0.8% (compared to 1.8% for the UK as a whole).
On Wednesday, the Scottish Government will publish its first estimate of economic growth for Q4 2017.
As always, their publication is likely to attract significant comment. Unfortunately, the immediate political debate is likely to be dominated by whether or not the figure is higher or lower than the equivalent number for the UK.
Whilst understandable, as we have argued on a number of occasions, the Scottish series can be volatile and rather than looking at one quarter’s results in isolation a longer-term perspective (of at least a year) is needed.
In this blog, we highlight some things to watch out for and what may drive the results (up or down).
Yesterday, the Scottish Government published new statistics on renewable energy generation up to the end of 2017.
The figures show a significant increase in output during the final three months of last year – with 2017 now the best year on record for renewables in Scotland.
With positive economic news not always that easy to find in recent times, these numbers are clearly welcome.
There is an added benefit. Next week’s GDP numbers for Q4 2017 will include this increase in electricity generation. So the numbers should provide a significant boost to the production sector of the economy, potentially lifting the overall quarterly growth figures substantially.
2018 promises to be an important year for the Scottish economy.
As the analysis in the latest Fraser Economic Commentary highlights, whilst the Scottish economy retains long-term strengths, early indications are that 2018 will be another challenging year.
Clearly Brexit remains the greatest headwind the Scottish economy faces.
We have argued on a number of occasions that the decision to leave the EU will damage Scotland’s long-term growth prospects.
Progress has been made with regard to the transition period the UK and the EU will operate within up to December 2020. But whilst this creates space for further discussion, most of the major economic issues with respect to the UK’s relationship with the EU post-Brexit remain unanswered.
In 2018 businesses will look for much greater evidence that the UK Government has a clear vision for life outside the EU that not only satisfies business but can also secure the necessary parliamentary support.