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August nowcast update!

We have updated our nowcasting model for the Scottish economy with the latest official statistics and survey data to produce new estimates of economic growth in Scotland in Q2 and Q3 of 2018.

Our nowcast for GVA growth in 2018 Q2 is 0.33% which, at an annual rate, is 1.34%.
Our first nowcast for GVA growth in 2018 Q3 is 0.39% which, at an annual rate, is 1.57%.

Relative to our last nowcast update our estimate for Q2 2018 has improved very slightly (up from 0.32%), but on balance the figures still suggest relatively weak growth.

This week, we’ll get revised official data for the Scottish economy when the next set of National Accounts are published. Summer is usually when more substantial revisions are put through the economic accounts – following publication of the latest Input-Output tables for Scotland in July each year – and these are likely to alter the pattern of past growth in Scotland. We’ll provide a short blog summarising these key changes.

All of this will be followed by – on the 19th of next month – the first set of official data covering the performance of the Scottish economy over the period March – June (Q2).

We’ll pick this issue up in more detail, as well as review the wider economic landscape, in the next Fraser Economic Commentary to be published in late September.

Brexit: the mood amongst Scottish businesses

The last month has been a tumultuous time in the Brexit negotiations following the publication of the Prime Minister’s Chequers plan and the subsequent resignation of senior UK Ministers.

To help understand how businesses in Scotland are viewing recent developments, over the course of July we have been speaking to around 350 businesses from across the country (and from a variety of different sectors).

The focus of the survey was not on whether or not businesses believe Brexit to be good or bad, but instead, how their preparatory plans were taking shape.

This blog summarises the results of our survey – with a full run down of the results to be published in next month’s Economic Commentary which we’ll be publishing in partnership with Deloitte.Continue reading

July Nowcast update…

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.

Economic Commentary: The medium-term fiscal outlook for the Scottish Government

The Scottish Government’s 2018/19 Budget is the 2nd of 5 budgets to be set this parliamentary term.

It contained allocations for 2018/19 only (the last time a Scottish Budget provided anything beyond single year allocations was 2014/15).

However, the government’s new Five Year Financial Strategy, published last month, provides a steer on how the pattern and distribution of Scottish resource spending (day-to-day public services) is likely to evolve over the next few years.

The Strategy contains forecasts of the Scottish budget for five years, based on forecasts for devolved tax revenues and the outlook for the block grant. It also sets out broad spending commitments.Continue reading

Today’s Fraser of Allander Economic Commentary in 10 bullet points

Today – in partnership with Deloitte – we published our latest Economic Commentary.

Alongside our analysis of the Scottish, UK and global economies, we include the following articles:

Could a reduction in alcohol consumption be good news for the UK economy? – Kevin Connolly, Katerina Lisenkova and Peter G. McGregor, FAI.
Performance of high growth firms in Scotland – Jennifer Turnbull and Kenny Richmond, Scottish Enterprise.
The output gap: what is it, how can it be estimated and are they fit for policy makers’ purposes? – Julia Darby and Stuart McIntyre, University of Strathclyde.

Today’s Commentary also includes an examination of the Scottish Government’s new Five Year Financial Strategy – which will be the subject of a blog later on today.

In this blog, we summarise some of the key points from our latest outlook.