November nowcast update…


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


In this blog we provide an update from our nowcasting model of the Scottish economy. This includes an updated estimate for Q3 of 2017 alongside our first nowcast for 2017 Q4.

Our model estimates:

  • GVA growth in 2017 Q3 is 0.32% which, at an annual rate, is 1.28%. On a quarterly growth basis, this is down over 0.1 percentage points on our estimate of growth in Q3 from last month.
  • GVA growth in 2017 Q4 is 0.34% which, at an annual rate, is 1.37%

Continue reading “November nowcast update…”

October Nowcast update!


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


This month we’ve again run our nowcasting model with the latest data for the Scottish economy, and have produced the following estimates:

  • GVA growth in 2017 Q2 is nowcast to be 0.37% (which, at an annual rate, is 1.50%)
  • GVA growth in 2017 Q3 is nowcast to be 0.43% or 1.75% at an annual rate.

These essentially represent ‘no change’ relative to our estimates from last month.

Since we produced these estimates we received a official data from the Scottish Government on GVA growth in Q2 2017. This (first) estimate put GVA growth in the period from April to June relative to the previous three months at 0.1%. The published data also include revisions to the previous GVA estimates as discussed here.

This is lower than our nowcast, although it is worth noting that as highlighted here, Q2 GDP growth in the Services sector (representing three-quarters of the economy) grew at +0.7%. Similarly in the previous quarter, as detailed here, the original estimate of +0.8% GDP growth (since revised down to +0.6%) was driven by strong growth among sectors representing around 6% of the Scottish economy (sectors which historically have quite volatile output growth). In addition, this growth was driven almost entirely by external demand growth (i.e. exports to both the rest of the UK and rest of the world).

The chart below illustrates how our model has performed relative to the initial release of Scottish GVA in each quarter (this is the measure we ask the model to nowcast). Our model appears to generally track the trend in Scottish GVA, including the slowdown at during the first half of 2015.

Overall, our nowcast is much more stable than the actual GDP series. This is not that surprising. Because our nowcast is based upon a wide variety of official and unofficial data it should tend to track general conditions in the economy relatively well. What it will be less able to track are unique one-off events in individual sectors – like we have seen in the last two quarters – which given Scotland’s size can influence the headline GDP series. In times of volatility, it is best to focus on longer-term trends rather than individual quarterly changes.

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Over the period on the chart below (representing the period where we’ve produced nowcasts in real time) our average GVA growth estimate is 0.45% compared to an average growth rate from the initial official estimate of GVA growth of 0.37%.

We will produce our first estimate for 2017 Q4 at the start of November.

March Nowcasts of the Scottish Economy


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


The performance of the Scottish economy has been relatively fragile for some time now; growth has slowed since early 2015 and shows little sign of picking up. In this blog we provide the latest update from our nowcasting model for Scotland. Further details on our approach and model are available here.

This month our estimates of growth in the Scottish economy put current growth (Q1 2017) at a modest 0.38%. This remains relatively low by historical standards, although better than some recent quarters.

Our most recent nowcast for 2016 Q4, for which official estimates are released by the Scottish Government next month, put growth at 0.42%. This is very marginally better than our current estimate for 2017 Q1.

Continue reading “March Nowcasts of the Scottish Economy”