October Nowcasts of the Scottish economy


Grant Allan & Stuart McIntyre, Fraser of Allander Institute, Department of Economics, University of Strathclyde

This post also appears on our Nowcasting blog: http://www.nowcastingscotland.com


Slightly later than usual, we are releasing the latest results from our Nowcasting of the Scottish economy. These results relate to Q2 and Q3 of 2016. Official estimate for 2016 Q2 will be released next week, and we will preview these in more detail early next week.

In the meantime, the results from our model are as follows:

– Our nowcast for GVA growth in 2016 Q2 is 0.31% which, at an annual rate, is 1.24%. This is slightly up on our last nowcast

– Our nowcast for GVA growth in 2016 Q3 is 0.38% which, at an annual rate, is 1.54%. This is also up slightly from the last nowcast.

Given that this is the final nowcast for Q2 which we will release, it is perhaps worth reviewing the 6 nowcasts that we have for this quarter, these are as follows:

img_0070
What should be clear from these results is that as soon as our model incorporated data which related to Q2 itself (the 4th nowcast), the nowcast estimate dropped significantly.

These model results suggest growth in Q2 of around 0.3%. Given that, as we have already said elsewhere, the closure of the Longannet coal fired power station at the end of Q1 is likely to knock anything up to 0.4% off of GDP, it is likely that the Scottish economy contracted in Q2. This is a ‘levels’ adjustment, and our results suggest that the Scottish economy otherwise grew in Q2, albeit rather slowly.

October 7, 2016

September 2016 Nowcasts of the Scottish Economy


Grant Allan & Stuart McIntyre, Fraser of Allander Institute, Department of Economics, University of Strathclyde

This post also appears on our Nowcasting blog: http://www.nowcastingscotland.com


We have crunched the numbers on the data on the performance of the different components of the UK and Scottish economies released during August, and we’re got some results to share in terms of what this suggests about Scottish economic growth in the second and third quarters of 2016.

To briefly recap, in our nowcasting work we have been producing monthly estimates of the current growth rate in the Scottish economy for nearly two years now. While experience suggests that our nowcasting models have tended to overestimate Scottish GDP growth, two features of our results are important. First, we have seen that with each revision to official statistics – as a result of more data becoming available – the official estimate has got closer to our nowcast results. Second, while we tend to overestimate the level of GDP growth, we have generally been good at estimating its direction.

Continue reading

September 8, 2016

August 2016 Nowcasts of the Scottish economy


Grant Allan & Stuart McIntyre, Fraser of Allander Institute, Department of Economics, University of Strathclyde

This post also appears on our Nowcasting blog: http://www.nowcastingscotland.com


Following the release of the Fraser Commentary last week, today we release the results of our latest nowcasts of the Scottish economy. These are the first to incorporate data on economic activity in June into our estimates, and thus do capture the first week after the Brexit vote. We have also produced our first estimate for Q3 (Jul-Sept), although the nowcast next month will be the first to include data on activity in Q3 itself, and so at this stage we can think of these as estimates based on previous activity and estimates.

  • 2016 Q2 nowcast is 0.29% which, at an annual rate, is 1.17%. This is down on our last nowcast.
  • 2016 Q3 is 0.38% which, at an annual rate, is 1.51%.

Continue reading

August 2, 2016

Yesterday’s Economic Statistics…..Revisions, Revisions, Revisions


Grant Allan, Stuart McIntyre, Graeme Roy, Fraser of Allander Institute, Department of Economics, University of Strathclyde


Yesterday’s economic figures for Scotland give us a better picture of the health of the Scottish economy and its likely resilience to coping with the heightened uncertainty post-EU referendum.

The focus of comment thus far has understandably been on the zero growth over the first 3 months of the year. Flat growth is obviously disappointing, and coupled with our expectation for what the data is likely to report for Q2, this suggests that the economy was largely on pause through the first half of the year.

What is less likely to be picked up by commentators and others are the revisions to past estimates of growth. Yet it is here that some interesting issues emerge.

Continue reading

July 21, 2016