Nowcasts of the Scottish economy

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


Economic forecasting and nowcasting is notoriously difficult – even more so in a period of heightened economic uncertainty.

With the 29th March looming large on the calendar, economic uncertainty at present is extraordinarily high.

With this in mind, we report the latest results from our nowcasting model for Scotland.

  • Our nowcast for GVA growth in 2018 Q4 is 0.29% which, at an annual rate, is 1.16%
  • Our nowcast for GVA growth in 2019 Q1 is 0.31% which, at an annual rate, is 1.24%

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March 11, 2019

The final countdown: insights from Scottish businesses as the UK heads towards Brexit

With only 3 weeks to go until the UK is scheduled to leave the EU, Scottish Businesses still don’t have any certainty over the terms of the exit, and crucially, if there will be any sort of transition to future arrangements.

Ahead of a series of votes in the House of Commons next week, we’ve been asking businesses in Scotland about Brexit and their preparations for it. We asked firms from across the country, and from a variety of different sectors.

The focus was not on whether businesses believe Brexit to be good or bad, but instead, how Brexit is affecting different areas of their day-to-day activities such as investment and recruitment. Also, we were interested to find out to what extent firms have embarked upon any plans in preparation for Brexit: specifically whether they are prepared for a no deal Brexit.

This blog summarises the results of our survey.

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March 7, 2019

Regional growth in 2018 – what happened?

This blog presents research outputs from an Economic Statistics Centre of Excellence project.

ESCoE provides the Office for National Statistics with research that addresses the challenges of measuring the modern economy, as recommended by Professor Sir Charles Bean in his Independent Review of UK Economics Statistics.

This research was undertaken by Strathclyde researchers Gary Koop @gary_koop, Stuart McIntyre @stuartgmcintyre and Aubrey Poon, and Warwick Business School’s James Mitchell

The blog below was first posted here: https://www.escoe.ac.uk/regional-growth-in-2018-what-happened/  Continue reading

February 21, 2019

Latest nowcasts of the Scottish economy

Just before Christmas the latest estimates of GDP growth in Scotland, covering the 3rd quarter of 2018, were released by the Scottish Government.

These data showed that growth in Scotland in Q3 was 0.3%, half the rate of the UK over the same period.

This represented a slowing of growth in Scotland relative to the previous quarter (in which growth was 0.5%).

Our latest nowcast for the Scottish economy covers the final quarter of 2018, and these suggest that growth in 2018 Q4 was 0.36% which, at an annual rate, is 1.46%. This is broadly in line with growth in the previous quarter.

The shape of economic growth in the UK and Scotland in the first three months of 2019 will of course be shaped by preparations for Brexit, and the extent of the resolution of the current uncertainty around Brexit.

Nevertheless we will provide an initial update in early February with our model predictions for growth in Q1 2019.

January 14, 2019

The latest Fraser of Allander Scottish Business Monitor

Yesterday, the latest Scottish Business Monitor (SBM) was published. The survey is supported by Royal Bank of Scotland.

2019 marks the 22nd year the SBM has been run by the Fraser of Allander. The survey provides a snapshot of activity in the Scottish economy well in advance of official data. It also acts as a gauge of future activity levels by monitoring the optimism level of firms.

The latest results

This latest Scottish Business Monitor covers activity up to the end of Q4 2018 and provides expectations to May 2020.

The FAI Business Activity Index sits at +10%. This is above the three year average of +5% but a fall of -6 since last quarter.

This latest data shows that the Scottish economy continued to grow in the final few months of 2018.

Our headline FAI Business Activity Index slipped a little from a net balance of 16% in Q3 to 10% in Q4. Whilst this is above the long-term series average, it is lower than businesses were expecting just three months ago. Small businesses appear to be the most gloomy.

Also of concern is the fact that businesses in Scotland are reporting not just a decline in investment – as has been the case now since early 2017 – but also a modest fall back in export activity.

See the full details of the publication here.

January 11, 2019