The State of Britain

SCOT

The country’s economy shrinks by 6.1% following lockdown but data for a pre-pandemic period shows an earlier expansion

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A nowcast for Scotland for the 12 months ended June 2020 on a rolling 4 quarter basis, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that Scotland’s economy contracted by 6.1%.

This ranked Scotland seventh in the UK and suggests the country’s economy has so far coped ‘poorer’ with the pandemic relative to the other eleven UK ‘regions’. Over the same period the East Midlands was ‘best’ with a fall of 4.5%, with London’s contraction the ‘worst’ at 7.4%; the UK’s decline according to the Office for National Statistics (‘ONS’) figures was 5.3%.

ESCoE is a partnership of research institutions and the ONS and has highlighted that during these unprecedented times, there is no historical data that their model can use to fully understand how the pandemic will impact regional economies. Consequently the partnership emphasises the uncertainties that exist with their nowcast at this time.

ONS GDP to December 2019

Official ONS figures for an earlier period which reflects Brexit uncertainty rather than Covid 19 turmoil, show the country’s performance relative to other parts of the UK. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its fifth estimate for the nine English regions, and Wales.  GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended December 2019 with the same quarter a year earlier. These showed that the economy in Scotland grew by 0.6%, the same as the previous quarter. This placed Scotland fourth (previous ranking seventh) out of the twelve UK ‘regions’.

London topped the table with growth of 5% whilst UK growth over the same period was 0.9%. The West Midlands was again the worst performer and contracted by 2.7%. The North East, Wales, South East, East Midlands and the North West were the ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures highlighted that the standalone quarter to December 2019 showed a slightly worsening picture in Scotland with the data poorer than the previous quarter. The country’s economy grew by 0.2% in October to December 2019, following +0.3% in July to September 2019.

This placed Scotland fourth (previous ranking seventh) out of the twelve UK ‘regions. Scotland was one of five regions of the UK that saw their economies grow but overall UK growth was flat.

The SW was top with quarterly growth of 0.8% whilst the North East was bottom, posting a drop of 1.3%.

Labour

Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the country was 11,000 higher at 124,000 between April and June; the uplift of 0.4% took the rate to 4.5%. At 5.2% the North East was the highest; Northern Ireland had the lowest rate of 2.5%, with the UK rate at 3.9%.

The South East had the highest employment rate at 79.7%, this compared with 71.7% in Northern Ireland and 74.3% in Scotland where 2.8m are employed; the UK rate was 76.4%.

Housing

Scotland’s average property price increased by 0.4% in April 2020 to £153,281. The uplift took the annual increase to 1.6%. In comparison, UK prices dropped by 0.2% to £234,612 during April, an annual growth rate of 2.6%.

The ONS data is based on completed housing transactions. Typically, a house purchase can take 6 to 8 weeks to reach completion so the price data in the April figures will therefore reflect those completions that occurred before lockdown.

This is the first publication of the UK HPI since it was suspended in May 2020. The UK Property Transactions Statistics for April 2020 showed that that between March 2020 and April 2020, transactions decreased by 55.5%.

The aviation, oil and tourism sectors depressed by the Pandemic, Falkirk continues to shine but Scots’ wages drop the most in the UK

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Job losses have begun to accelerate especially in those sectors most affected by the pandemic.

Rolls Royce has confirmed the locations of the job losses it is to make this year. Last month the Derby-based firm said 9,000 jobs were to be cut, mostly in its Civil Aerospace division. Around 700 of these roles will go at Rolls-Royce, Inchinnan.

BP has announced plans to cut 10,000 jobs following a global slump in demand for oil due to the coronavirus crisis. The firm has not said how many jobs will be lost in the UK but it is thought the figure could be close to 2,000, BP’s North Sea HQ is in Aberdeen.

In the tourist sector, c1,800 jobs are under threat at the Macdonald Hotel chain as it looks to cut costs because of the pandemic. The chain has 31 hotels across the UK, 11 of them in Scotland, and currently employs c2,200 people. Crieff Hydro group, which includes Crieff Hydro, Peebles Hydro and Ballachulish Hotel has given notice that 241 staff face redundancy at the start of August.

The Scottish government’s chief economist Gary Gillespie has warned that Scotland’s economy may not return to pre-pandemic levels until the start of 2023. Official figures show that, in the first half of May, almost a fifth of businesses were temporarily closed and more than 750,000 workers were being furloughed.

Ex-banker Benny Higgins, chair of the Scottish government’s economic recovery panel, has recommended that a new agency be set up to take stakes in firms in financial distress.

The Stats

This month the ONS published regional household disposal income figures for 2018. Total gross disposable household income (GDHI) in the UK in 2018 was £1.4bn. Of that, 86.3% was in England, 7.6% was in Scotland, 3.8% was in Wales and 2.3% was in Northern Ireland.

The average UK income per head after direct and indirect taxes were taken off was £21,109.  England was the only country above the UK average at £21,609 but growth in incomes was best in Scotland and Northern Ireland at 5.1% and 4.7%. England’s growth was the same as the UK at 4.6%; Wales grew by 4.4%.

At a regional level, London had the highest GDHI per head where, on average, each person had £29,362 available to spend or save; the North East had the lowest at £16,995 which compares with a UK average of £21,109. Scotland was £19,572.

At a local level, Kensington and Chelsea and Hammersmith and Fulham had the highest GDHI per head at £63,286 with Nottingham the lowest at £13,138. All the top 10 local areas were in London or the South East with the bottom 10 within the North West, Yorkshire and The Humber, East Midlands, West Midlands, and Northern Ireland regions.

The wealthiest part of Scotland was Edinburgh with incomes of £23,374. This ranked the city 34th out of 179 districts of the UK.

The poorest areas of the country were Glasgow at £17,145, beating East Ayrshire at £17.316. Glasgow was ranked 132nd in the UK, Nottingham and Leicester were bottom.

In terms of regional growth, the largest increase was in London at 5.2% with the smallest in the East Midlands at 3.6%. Scotland was 5.1%.

At the local level, Kensington & Chelsea and Hammersmith & Fulham was again best in the UK with growth of 7.6% whereas Luton was the worst and only grew by 0.9%.

In Scotland, income growth in Falkirk was the third highest in the UK at 6.6% with East Dunbartonshire a regional second at 6.3%. West Lothian was the worst regional performer with growth of 3.0%, a ranking of 159th.

Labour

More data from the ONS showed unemployment in the country was 30,000 higher at 127,000 between February and April; the big uplift of 1.1% took the rate to 4.6%. Despite narrowing the gap with the West Midlands (4.8%), at 5.2% the North East was still the highest; Northern Ireland had the lowest rate of 2.3%, with the UK rate at 3.9%.

The South East had the highest employment rate again at 79.5% which compared with 74.3% in Scotland where 2.7m are employed; the UK rate was 76.4%.

Public sector employment in Scotland increased by 1.2% in March to 562.000, which was 21.3% of the workforce. At 25.2% Northern Ireland had the highest level of public sector employment which compared to 13.9% in London which was the lowest.

In March, average earnings in Scotland fell by £37 to £611 per week. London had the highest average earnings of £847 and the lowest average earnings of £537 were recorded in Northern Ireland.

Earnings in the NE increased the most in the UK by £60 per week whereas the biggest drop in wages was £37 in Scotland.

In the UK overall, average earnings grew by 1.7% or by 0.4% after inflation. If bonuses are included real pay fell by 0.4%.

The public sector saw the highest estimated growth, at 3.2% for regular pay, while negative growth was seen in the construction sector, estimated at negative 1.8%. Both the wholesaling, retailing, hotels and restaurants sector and the manufacturing sector saw very weak growth at 0.1% for regular pay.

Housing

Estimates of private sector rents for the year to March 2020 were published by the ONS this month.

The median monthly rent was an all time high of £700 in England between 1 April 2019 and 31 March 2020. London had the highest median monthly rent at £1,425 with the North East the lowest at £495. Within local authorities the difference in monthly rental price between the most and least expensive was nearly £2,100.

Data for the 12 months to May 2020 showed private rental prices paid by tenants in the UK rose by 1.5%, unchanged from the previous month. Rental prices grew by 1.5% in England, 1.2% in Wales and 0.6% in Scotland.

Rental prices increased the most in the South West of England, up by 2.5%, with the lowest price growth in the North East of England at 0.8%, Scotland recorded 1.2%.

Given the closure of the housing market following lockdown the ONS has suspended its property price index until further notice.

Following lockdown Scotland’s economy shrinks by 2.7%, the second fastest fall in the UK, pre-pandemic data shows modest growth

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A quarterly nowcast for Scotland for the 3 months ended March 2020 which captures the start of lockdown, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that Scotland’s economy contracted by 2.7%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked Scotland eleventh and suggests the economy has so far coped poorly with the pandemic relative to the other eleven ‘regions’ of the UK. Over the same period the East Midlands was ‘best’ with a fall of 1% with Northern Ireland’s 3.9% contraction the ‘worst’; the UK decline was 2%.

For the 12 months ended March 2020 on a rolling 4 quarter basis, ESCoE has estimated that Scotland’s growth has dropped from 1.6% to 1.1%.

This ranked Scotland fourth (previous ranking fifth) and suggests the country has improved its position relative to the other eleven parts of the UK on this measure. Over the same period UK growth was 0.5%; growth in London (ranked first) was 1.8%; and growth in the East Midlands (ranked twelfth) was -0.6%.

ONS GDP to September 2019

Official ONS figures for an earlier period which reflects Brexit uncertainty rather than Covid 19 turmoil, show the country dropping a few places relative to the other parts of the UK. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its fourth estimate for the nine English regions, and Wales.  GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended September 2019 with the same quarter a year earlier. These showed Scotland’s economy grew by 0.6%, the same as the previous quarter. This placed Scotland eighth (previous ranking fifth) out of the twelve UK ‘regions’.

London topped the table with growth of 5% whilst UK growth over the same period was 1.2%. The West Midlands was the worst performer and contracted by 1.5%. The East of England and the North West were the other two ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures also highlighted that the standalone quarter to September 2019 showed an improving picture in Scotland with the data better than the previous quarter. Scotland economy grew by 0.3% in July to September 2019, following -0.3% in April to June 2019.

This placed Scotland seventh (previous ranking sixth) out of the twelve UK ‘regions’. Four regions of the UK saw their economies contract but overall the UK grew by 0.5%.

Again London was top with quarterly growth of 1.4% whilst the North West and Northern Ireland contracted by 0.2%, with the East Midlands posting a drop of 0.3%.

In this period, Scotland’s best sector was electricity with growth of 6.8%. Overall production grew by 1.1%, services by 0.1% and agriculture by 1.3% with construction flat.

Labour

More largely pre-pandemic data from the ONS showed unemployment in the country was 16,000 higher at 113,000 between January and March; the uplift of 0.6% took the rate to 4.1%. At 5.4% the North East was the highest; Northern Ireland had the lowest rate of 2.4%, with the UK rate at 3.9%.

The South East had the highest employment rate at 80.2% which compared with 74.7% in Scotland where 2.7m are employed; the UK rate was 76.6%.

Housing

The country’s average property price increased by 0.4% over the month to £151,856. The uplift took the annual increase to 1.5%. In comparison, UK prices dropped by 0.2% to £231,855 during March, an annual growth rate of 2.1%.

The ONS data is based on completed housing transactions. Typically, a house purchase can take 6 to 8 weeks to reach completion so the price data in the March figures will therefore reflect those completions that occurred before lockdown.

Given the closure of the housing market following lockdown the ONS has suspended its index until further notice.

Increased exports helps Scotland record a trade surplus, the Western Isles imports the least services in the UK, Scottish property prices tumble

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HMRC has published the latest regional trade figures which show exports and imports for 2019. Given the time period this data reflects Brexit uncertainty rather than Covid 19 turmoil. 

In the year to December 2019, the overall value of UK trade in goods exports increased by 2.1% to £346bn compared with the same period in 2018. The overall value of imports increased by 0.3% to £483bn.

There was an increase in the annual export value in Scotland along with five of the 12 UK ‘regions’. Scotland’s exports increased by 4.4% or £1.4bn to £34bn which was 10% of the UK total. The increase took Scotland above the West Midlands to third in the UK rankings.

The leading regional exporter remained the SE of England at £46bn with Northern Ireland the smallest at £9bn. The best performer in percentage terms was London which was up by 17.2%, with Yorkshire & The Humber falling by 6.3%.

There was a decrease in the annual import value in Scotland along with five of the 12 UK ‘regions’. Scotland’s imports fell by 7% or 1.9bn to £24bn which was 5% of the UK total. The figures, which are experimental, suggest that in 2017 Scotland had a trading surplus in goods of c£10bn. The only other part of the UK to record a surplus was Northern Ireland.

The biggest regional importer was the SE of England at £98bn with Northern Ireland the smallest at £8bn. In percentage terms London added 12% to imports compared with Scotland which as stated above, reduced imports by 7%.

The Netherlands was Scotland’s largest export market with oil and related products the best export. Most of Scotland’s imported goods came from the USA with machinery and transport equipment the biggest import.

Services

This month the ONS published data on regional services imports for 2017. The biggest component of services imported into the UK was £51bn of travel. This was 28% of the £181bn UK total imports of services.

Scotland imported £13bn of services value in 2017 of which £4bn was travel. The biggest importer of services was London at £60bn with Northern Ireland importing £1.6bn.

At a local level, the biggest importer of non-travel services into the UK was Camden and City of London at £14.5bn, almost double the next largest importer which was Westminster at £7.9bn. Of the 167 local areas, the Western Isles of Scotland imported the least amount, £21m, with Anglesey next at £31m.

In Scotland, Aberdeen City and Aberdeenshire imported £2.5bn of non-travel services compared with The Western Isles.

The data on services exports was released by the ONS last year which showed Scotland exported £22bn of services. London exported the most services at £117bn which compared with Northern Ireland at £2.9bn.

Other data

The ONS has also published the latest regional construction sector data to December 2019 which again reflects Brexit uncertainty rather than Covid 19 turmoil. Compared with the previous quarter all parts of the UK recorded a decline with Scotland posting a 3% drop to £3.8bn. The biggest decrease in the UK was 4.6% in the West Midlands; the SE was best with a 0.9% fall.

More pre-pandemic data from the ONS showed unemployment in the country was 1,000 lower at 105,000 between December and February; the drop of 0.1% took the rate to 3.7%. Northern Ireland had the lowest rate of 2.5% with the NE of England the highest at 5.6%, the UK rate was 4%.

The South East of England had the highest employment rate at 80.1% which compared with 75.4% in Scotland where 2.7m are employed; the UK rate was 76.6%.

Scotland’s average property price fell the most in the UK over the month by 1.6% to £150,524. The drop took the annual increase to 2.5%. In comparison, UK prices dropped by 0.6% to £230,332 during February, an annual growth rate of 1.1%.

Edinburgh leads Scotland’s productivity growth; Scottish Enterprise outperforms Highlands and Islands Enterprise at the development agency level

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The Scottish economy grew by 0.2% in the final three months of 2019, according to Scottish Government figures, with construction growing by 0.7% and services 0.5% but production contracted by 1.2. Over the same period UK GDP was flat.

Compared to the same quarter last year, Scotland’s GDP grew by 0.7%. Over the same period, the UK as a whole grew by 1.1%. Overall GDP grew by 0.8% in 2019 compared with 2018. The UK as a whole grew by 1.4% over the same period.

The largest single contribution to growth in the final three months of 2019 came from Business Services & Finance at 0.22% and within this professional, scientific & technical industries added the most at 0.7%.

Like most ‘regions’ of the UK, output per hour in Scotland is below the UK average. Productivity per hour in the country was c3% below the UK average which ranked the country third for 2018. One reason for this is the high levels of hours worked and high productivity in London and South East which pulls up the UK average so much that all other regions fall below it.

The ONS has now released data for a longer period and at a subregional level. This gives further insight into the Scottish performance.

Perhaps the most useful is the 2018 results for the 44 enterprise regions in the UK which comprise the 38 English local enterprise partnerships (LEPs) and six enterprise regions in Scotland, Wales and the border regions.

Thames Valley Berkshire LEP had the best productivity (in terms of hours and jobs) in 2018 at 35% above the UK average whereas the Black Country LEP at 24% below was the worst.

Unsurprisingly, both of the country’s economic agencies recorded productivity just below the UK average. Scottish Enterprise was the best and was ranked 12th at 3% below. Highlands and Islands Enterprise was ranked 15th at c5% below.

In terms of productivity growth between 2010 and 2018 the Coventry and Warwickshire LEP was top with growth of 16%. Twelve economic regions recorded productivity levels lower in 2018 than 2010. The worst performer was the Buckinghamshire Thames Valley LEP which saw productivity drop by 11%.

The country’s results for productivity growth were more mixed. With growth of 5.1% Scottish Enterprise was the tenth best in the UK. Highlands and Islands Enterprise was ranked 30th nationally with growth of just 0.5%.

Two of the country’s subregions recorded productivity above the UK average with Eastern Scotland at +11% and North Eastern Scotland +9%. Of the other three, Highlands and Islands was 4% below the average with West Central Scotland -13% and Southern Scotland -23%.

At district level, led by Edinburgh (+26%), eight of the country’s areas recorded productivity above the UK average. The other fifteen areas dropped below the UK average, with South Ayrshire recording the lowest productivity at -23%.

The growth in hours worked between 2010 and 2018 in West Central Scotland was 9%, beating Highlands and Islands and Eastern Scotland which recorded 7%, and North Eastern Scotland on 6% with Southern Scotland on 5%. In UK terms this level of growth was in the bottom half of the UK’s 41 subregions, with Southern Scotland ranked 39th.

If the increase in economic output is also factored in then the sub regional performances are more mixed. Eastern Scotland was again top and ranked 16th in the UK with growth of 4%, West Central Scotland was placed 27th with 5% growth, just beating Southern Scotland by one place. Highlands and Islands was ranked 23rd with 2% growth but with only 0.7% growth, North Eastern Scotland was ranked 31st.

More data from the ONS showed unemployment in the country was 4,000 lower at 96,000 between November and January; the fall of 0.2% took the overall rate to 3.5%. Northern Ireland had the lowest rate of 2.4%, the North East of England the highest at 6.2%, with the UK rate at 3.9%.

The South East had the highest employment rate at 80% which compared with 74.9% in Scotland where 2.7m are employed; the UK rate was 76.5%.

Scotland’s average property price increased by 0.6% to £152,121, which took the annual increase to 1.6%. In comparison, UK prices decreased by 1.1% to £231,185 during January, an annual growth rate of 1.3%.

Scotland’s economic growth ranked fifth and stable relative to other parts of the UK, the country posts the best productivity growth and is ranked third overall

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For the 12 months ended December 2019, a nowcast published by the Economic Statistic Centre of Excellence (‘ESCoE’) on a rolling 4 quarter basis, has estimated that Scotland’s growth has been maintained at 1.6%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the country fifth (previous ranking fourth) and suggests Scotland has more or less preserved its position relative to the other eleven parts of the UK. Over the same period UK growth was 1.4%; growth in London (ranked first) was 3.3%; and growth in the East Midlands (ranked twelfth) was 0.1%.

The latest official ONS figures for an earlier period are more mixed. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the nine English regions and Wales. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before the ESCoE estimates shown above and compare GDP in the quarter ended June 2019 with the same quarter a year earlier. These more volatile figures showed that Scotland grew by 0.6%, down from 1.4% growth the previous quarter. This placed the country sixth (previous ranking eighth) out of the twelve UK ‘regions.’

London topped the table with growth of 4.5% whilst UK growth over the same period was 1.4%. The NW was the worst performer and contracted by 0.7%, one of three ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures highlighted that the standalone quarter to June 2019 was worse for Scotland than the previous quarter. The Scottish economy contracted by 0.2% in April to June 2019, following growth of 0.5% in January to March 2019.

This placed the country seventh (previous ranking fifth) out of the twelve UK ‘regions’. Six regions of the UK saw their economies contract as did the UK overall by 0.2%. The WM was the worst performer in Q2 with -1.6% whereas London was the best with +1%.

In this period, the contraction can be attributed to spirits & wines dragging down the food & drink sector and pharmaceuticals driving contraction in the refined petroleum, chemicals & pharmaceuticals sector.

Overall Scottish construction contracted by 2.2% and production by 1.1% with services growing slightly by 0.1%.

Productivity

Like most regions of the UK, output per hour in Scotland was below the UK average. Productivity in the country was 2.4% under the norm which ranked the ‘region’ third in the UK.

Two regions had productivity above the UK average in 2018, London +31.6% and the South East +9.1%. These regions’ record high levels of hours worked and their elevated productivity pulls up the UK average so much that all other regions fall below it. Wales was furthest off the average at -17.2%.

Scotland was also third in the rankings in terms of output per job. The country’s 3.6% below the UK average compared with London at 40.5% above.

In terms of growth in output per hour, six regions of the UK expanded. Scotland was ranked first as output per hour grew by 2.3% which compared with the biggest contraction in Yorkshire and the Humber at 2.5%. UK growth was 0.5%.

Sectorally, productivity in human health/social services was better than expected but arts/entertainment/recreation disappointed.

On average, in 2018 the UK economy produced about £35 of value for each hour worked, with finance and insurance top at c£69 per hour compared with accommodation and service activities productivity at c£17 per hour.

Labour

More data from the ONS showed unemployment in Scotland fell by 14,000 to 96,000 between October and December; the drop of 0.5% moved the overall rate down to 3.5%. Northern Ireland had the lowest rate of 2.4%, with the UK rate at 3.8%. The highest rate was 6.1% which was recorded in the North East.

The South West still had the highest employment rate at 80.1% which compared with 75% or 2.7m in employment in Scotland; the UK rate was 76.5%.

In December, average earnings in the country increased by £27 to £648 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. Scotland was ranked fourth (previous ranking also fourth).

In the UK overall, average earnings grew by 2.9% or by 1.4% after inflation. After adjusting for inflation, regular pay is now at its highest level since 2000, whereas total pay (which includes bonuses) is still 3.7% below its peak in February 2008.

Housing

Scotland’s average property price fell by 1.5% over the month to £151,603; the drop took the annual increase to 2.2%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.

Scotland’s fiscal deficit eases, no clear way to measure the value of City Deals and well-being vs GDP

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In the ONS’s estimate of regional public spending and regional tax revenues in 2019, Scotland had a deficit of £14.8bn, a smaller shortfall than the £16bn recorded in 2018. On a geographic rather than a population basis the deficit fell from £15.1bn in 2018 to £13.5bn in 2019. This compared with London, which had the highest surplus of £38.9bn.

On a per person basis, Scotland’s deficit was £2,713, lower than the £2,964 recorded in 2018. London had the highest surplus of £4,369 per person whereas Northern Ireland had the biggest shortfall at £4,978.

The only areas of the UK to run surpluses were London, the SE of England and the East of England. The West Midlands and the North East were the two regions in the UK to increase their net fiscal deficits over the year; the other seven regions reduced their shortfalls.

At a national level, the UK had a deficit of £623 per person which splits into deficits of £68, £2,713, £4,289 and £4,978 for England, Scotland, Wales and Northern Ireland respectively.

Public spending in Scotland was £78.8bn or £14,497 per head, an increase on the 2018 figure of £77.2bn. London had the biggest spend of £123.9bn or £13,826 per head whereas Northern Ireland had the lowest at £27.9bn or £14,821 per head. Total government spending was £853bn or £12,835 per head.

Scotland collected £65.4bn in taxes in 2019. London contributed the most to the Exchequer at £161.9bn, compared with the lowest contribution of £18.5bn which was from Northern Ireland. Overall the state raised £811.3bn or £12,213 per head in taxes, an uplift of £34.1bn or £461 per head compared with 2018.

More data from the ONS showed unemployment in Scotland fell by 7,000 to 105,000 between September and November 2019; the decrease of 0.3% took the overall rate to 3.8%. Northern Ireland had the lowest rate at 2.3% with the UK rate at 3.8%.

The South West had the highest employment rate at 79.8% which compared with 74.3% in Scotland. UK employment was estimated at 76.3%.

Scotland’s average property prices increased by 0.4% during November 2019, the uplift to £154,798, increased annual growth to 3.5%. In comparison, UK prices increased by 0.4% to £235,298 an annual growth rate of 2.2%.

Away from the stats, a report by Audit Scotland says there is no clear way to measure the success of Scotland’s £5.2bn city deals. City region deals are collaborations between the UK and Scottish governments plus local councils and are designed to promote economic growth and create jobs. Deals have been agreed in Glasgow, Aberdeen, Inverness and Highland, and Edinburgh and south east Scotland plus another eight deals are in development.

The watchdog says the Scottish government has not outlined how it will measure the programme’s value for money and it found that it was not clear why some projects were approved for funding over others.

One way value for taxpayers’ money can be measured is via improvements in GDP, however, quality of life should be as important as economic growth, according to Scotland’s First Minister. She argued in a speech in Edinburgh that creating an economy where collective wellbeing is as fundamental as GDP.

Scotland has fallen five places from 16th to joint 21st in the latest Scottish Trends Index Of Social and Economic Wellbeing. The index uses OECD data from 2006 to 2018 based on a range of measures.

Scotland and Wales were the joint biggest fallers over the 12-year period whilst the biggest risers were Estonia and Poland. The report said the fall in Scotland was mainly due to declining GDP and education scores.  

On interventions, the Scottish National Investment Bank should be operational by the end of 2020. The state bank is designed to make long-term investments in Scottish firms over a period of 10 to 15 years.

The Scottish government committed £2bn of taxpayers’ money to fund the bank over the next decade after MSPs passed the necessary legislation. Whether there is sufficient market failure to warrant state intervention in business finance on this scale remains a moot point.

Also on interventions, semiconductor manufacturer Diodes Incorporated, which took over Texas Instrument’s Greenock site last year, is set to receive a £14m taxpayer inducement from Scottish Enterprise. The funds form part of a £47m investment in upgrading the site and training the 300-strong workforce. The company has also received funding from Inverclyde Council to assist with the development of the site.

Robert Burns is worth £203m pa to the Scottish economy according to a Glasgow University study. Burns-related tourism brings in c£155m, largely benefiting Ayrshire and Arran where the poet was born and lived most of his life.

The V&A Dundee had a £75m impact on the Scottish economy last year, according to research by the museum’s consultants. Of this, museum visitors alone were found to have been worth £21m to the Dundee economy.

On jobs, a £2m Business Growth Fund investment in the Livingston-based Window Supply Company, a window manufacturer and supplier, should see its workforce grow from 40 to 125 over the next three years.

TSB and Tesco Bank will each create 100 new technology jobs in Edinburgh. Tesco is recruiting software and systems engineers, systems architects, solution designers, project managers, and IT and business analysts. TSB has announced a new IT centre in Edinburgh as part of a £120m three-year plan announced in the wake of the bank’s 2018 IT failure.

Administrators say c100 jobs have been saved following the purchase of car sales company Leven Car Company in Edinburgh. Twenty three staff at the Borders branches of the firm were made redundant last week.

But in Dumfries, 44 staff have been made redundant by administrators after armoured vehicle firm Penman Engineering folded; 17 workers have been retained to assist the administration process. The company dates back to 1859 and specialises in armoured military and security vehicles.

In 2018 the highest annual growth of the 179 UK sub national areas was in Falkirk, Edinburgh’s GDP per head in the UK top 10 but Shetland declines and Highlands and Islands Enterprise sinks from 11th to 42nd in the UK rankings

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Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its 2018 full year estimate of economic activity by UK country, region and local area using gross domestic product.

The figures showed the Scottish economy grew by 0.9% in 2018 down from growth of 1.6% in 2017. This placed Scotland ninth (2017 ranking also ninth) out of the twelve UK ‘regions.’

The UK and England growth rate in 2018 was 1.4%. Wales grew by 0.9% and Northern Ireland recorded negative growth of 0.5%.

Within Scotland, the Falkirk economy grew the fastest at 10.5%, followed by Edinburgh at 3.8% and the Western Isles at 3.7%. Across the UK, the highest annual growth of the 179 local areas was in Falkirk.

Eleven areas of the country saw their GDP decline in 2018. Shetland recorded a drop of 7.7% (the third worse in the UK), followed by Clackmannanshire and Fife at 3.8% and Perth and Kinross at 2.8%.

GDP per head growth of 10.3% to £33,868 was seen in Falkirk although at £51,224 Edinburgh was top. Indeed Edinburgh, at eighth place, was one of two areas outside of London and the South East to feature in the UK top 10. GDP per head fell by 7.4% in Shetland to £36,527 but East Ayrshire and North Ayrshire mainland was bottom in the country with £16,795.

In terms of UK extremes, GDP per head in Camden and the City of London was £395,309 with Ards and North Down at £15,034; East Ayrshire and North Ayrshire was the next lowest in the UK. These figures are a guide and are influenced by commuter flows.

In 2018, key drivers of the Scottish economy were information and communication up 7.5%, arts/entertainment up 5.4% and administrative support services up 4.8%. Those areas that did not perform well were agriculture down 1.4%, mining down 2.6% and electricity/gas services declined by 3.7%. Overall services grew by 1.6%, construction fell by 3.6% and production dropped by 1.0%.

The 2018 performance of Scotland’s two development agencies was also highlighted by the ONS. Of the UK’s 45 development bodies or economic regions, Greater Birmingham and Solihull LEP was ranked first in the UK with growth of 2.8%. Scottish Enterprise moved up the rankings from 29th to 23rd with growth of 1.1% but Highlands and Islands Enterprise sank from 11th to 42nd with negative grown of 0.8%. Tees Valley LEP was last (45th) with negative growth of 2.1%.

In terms of a more recent time period, data released by the Scottish Government in December showed the economy grew by 0.7% to September 2019. This compared with 1% growth in the UK overall.

This figure was poorer than the nowcast estimate from ESCoE in November. Part of the gap is explained by slightly different methods of calculation used by the Scottish Government and by the ONS but not all of it.

Increased electricity output and finance/business services helped grow GDP by 0.2% each. Overall, construction was flat, services grew by 0.2% and production was up by 0.9%. Poor performers were the retail/wholesale and accommodation/food services sectors which contracted.

Unemployment in Scotland dropped by 9,000 to 100,000 between August and October 2019; the drop of 0.3% took the overall rate to 3.7%. The UK rate is 3.8%. The highest rate was 6.1% which was recorded in the North East.

The South West had the highest employment rate at 80.8% which compared with 74.5% in Scotland. The UK rate was 76.2%.

Scottish average property prices fell by 0.9% during October 2019 which took prices to £153,692, an annual increase of 1.4%. In comparison, UK prices fell by 0.7% to £232,944, an annual growth rate of 0.7%.

Over the summer Scotland’s economy moves up to fourth in the UK rankings, some concerns over the unemployment rate, and consultation on the replacement for EU structural funds begins

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The UK government has promised to replace EU funding to the regions with a new UK Shared Prosperity Fund. EU structural funds (regional development and social funds) have recycled £740m into Scottish projects between 2014-20.

Last month the Scottish Government launched a consultation on how these funds should be replaced after Brexit.

To complicate the issue, the EU has proposed that ‘transition region’ status should be extended to cover all regions with a GDP per head between 75-100 per cent of the EU average, compared to 75-90 per cent at present.

Seven additional UK sub-regions are likely to slip below the threshold of 100% EU average GDP per head, qualifying them for ‘transition region’ status. South West Scotland falls into this new category.

It is not clear how much extra funding South West Scotland would have received from the EU, but €50 per head over the next EU spending round is not an unreasonable assumption.

In Dundee, the Michelin site has received a £60m funding commitment to turn the former plant into an innovation centre focusing on sustainable mobility, clean transport and low carbon energy.

Last year the firm said that it would close the plant with the loss of all 845 jobs in 2020. More than 400 employees have found new jobs since Michelin announced the closure of the factory.

The £60m investment is supported by Michelin, Scottish Enterprise and Dundee City Council. It is not clear at this stage what the breakdown of the investment is or how much public money is involved.

On transport, figures released by Virgin Trains show more people travelling between London and Glasgow by rail rather than air. The record level was driven by a 6% year-on-year increase in the number of passengers travelling, c718,000, up from c244,000 a decade ago.

FirstGroup and Italian firm Trenitalia, are to take over the running of the route from December, replacing Virgin, which was barred from bidding. In the latest National Rail Passenger Survey, of the 25 operators in the country, Virgin was ranked second.

FirstGroup operates TransPennine Express, Virgin’s only competitor on most of the northern part of the West Coast mainline. The Competition and Markets Authority has raised concerns train ticket prices could rise under the new franchise.

The Authority said that on 21 routes, passengers would have little or no option but to choose a service run by FirstGroup. At Lockerbie, where there are no Scotrail services, passengers will have no choice. The Authority’s investigation into the new contract is ongoing.

The Stats

Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its next estimates for the nine English regions and Wales, for the year to March 2019. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

The Scottish figures are compiled by statisticians and economists in the Office of the Chief Economic Adviser of the Scottish Government.

The latest available comparable figures showed that Scotland’s economy grew by 1.4% compared with 1.5% in the year ended December 2018. This ranked the ‘region’ eighth (was previously seventh) out of the twelve UK ‘regions’.

London topped the table with growth of 4.2% with Yorkshire and The Humber bottom at -0.3%. Propelled by a drive to meet the original March 31st Brexit date, UK growth over the same period was 2.2%.

The ONS figures also showed that growth in Scotland accelerated in the quarter to March 2019. The economy grew by 0.5% in January to March 2019, following growth of 0.1% in October to December 2018.

In this period, food & drink and pharmaceutical & related industries accounted for more than half of the 0.5% growth.

Overall, output in the construction sector increased by 2.0%, output in the production sector increased by 1.8% and output in the services sector grew by 0.1%.

Estimates published by ESCoE last month for the year ended September 2019, a more recent period than the ONS figures, ranked Scotland fourth (previously sixth) with growth of 1.55%, which suggests the country has had a better summer relative to other parts of the UK.

Using this metric, UK growth was 1.45%. Growth in London (ranked first) was 2.32%, which compared with growth in the South West of England (bottom) at 0.41%

More data from the ONS showed that unemployment increased by 8,000 to 110,000 between July and September; the increase of 0.4% was the second highest in the UK and took the overall rate to 4.0%. Northern Ireland had the lowest rate of 2.5%, with the UK rate at 3.8%. The highest rate was 5.9% which was recorded in the North East.

The South West had the highest employment rate at 81.0% which compared with 74.4% in Scotland; the UK rate was 76.0%.

In September, average earnings in Scotland were up by £21 to £622 per week. London had the highest average earnings in the UK of £830. The lowest average earnings of £527 were recorded in Wales. In the UK overall, average earnings grew by 3.6% or by 1.8% after inflation.

Scotland’s average property price increased by 0.3% over the month to £155,029 which took the annual uplift to 2.4%. In comparison, UK prices fell by 0.2% to £234,370 during September, an annual growth rate of 1.3%.

Largely negative economic data and a slew of job losses, the North Coast 500 shows which economic road to take

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Data released by the Scottish government showed GDP contracted by 0.2% over Q2 instead of the initial 0.3% estimate. Compared to the same quarter last year, Scotland’s GDP has grown by 0.6%, revised down from the first estimate of 0.7%. 

This differed from the nowcast estimates from ESCoE last month which had growth in Scotland at 1.4%. Part of the gap is explained by different methods of calculation used by the Scottish government and by the ONS but not all of it.

The construction sector fell by 2.4%, the production sector fell by 1.5%, while the services sector grew by 0.2%.

Unemployment in Scotland increased by 20,000 to 112,000 between June and August, the increase of 0.8% was by some way the biggest jump in the UK and took the overall rate to 4.1%.

The South West of England continued to record the lowest rate at 2.4% with the UK rate at 3.9%. The highest rate was 5.8% which was recorded in the North East of England.

The South West also had the highest employment rate at 81.0% which compared with 74.3% in Scotland. UK employment was estimated at 75.9%.

Scottish average property prices increased by 0.3% to £154,549, which took annual growth to 1.6%. In comparison, UK prices grew by 0.8% to £234,853 during August, an annual growth rate of 1.3%.

Analysis by the BBC has found workers living in coastal communities in Great Britain earn on average £1,600 less per year than those living inland. There was no surprise that since 2010 wages fell by c20% in real terms in Aberdeen South.

Argyle & Bute and the Western Isles were also in the top ten biggest fallers in the UK. In seaside towns median wages were £22,104 compared with £23,785 in non-coastal areas.

The ONS’s Personal Well-being (or Happiness) Index has ranked Scotland last out of the 12 UK ‘regions’ in terms of improved happiness since the last survey. Overall though, the Northern Irish were still the happiest in the UK with Londoners still the most miserable.

Development

It has been revealed that the Scottish government’s own adviser was against the nationalisation of Ferguson shipyard. The yard’s administrators have now gained approval from creditors to hand it over to taxpayers via the Scottish government.

New figures from the administrator show £49.7m has already been deployed from the public purse to keep the business afloat.

Single malt Scotch whisky exported to the United States now has a tariff of 25%. The new duty is one of the measures being imposed by the US in retaliation against EU subsidies given to aircraft maker Airbus.

Scotch exports to the US last year were worth £1bn with single malts accounting for a large share of that.

Sometimes huge sums are not needed to further economic development. The North Coast 500 generated £22.8m for the north Highlands’ economy last year and created 180 new jobs, according to research by Glasgow Caledonian University’s Moffat Centre for Tourism.

The 516 mile-long touring route takes in a network of roads around the region’s north, east and west coasts.

Room occupancy throughout the north Highlands went up from 52% in 2014 to 78% in 2018. There was also a 19.9% increase in visitors to free admission attractions and paid admission attractions went up by 41.7%. Full marks to the North Highland Tourism Initiative.

Jobs

Scotland’s unemployment figures could get worse, after a slew of job losses this month.

Korean wind turbine maker CS Wind said over 70 jobs could be lost at its Campbeltown factory in Argyll. The company cited reductions in support for renewable energy, as well as a failure to secure major project work as reasons why.

Perthshire ventilation system company MJ Ventilation has gone into liquidation with the loss of all 81 jobs. The Coupar Angus firm had solvency problems compounded by bad debts from the insolvencies of Carillion and McGill Electrical.

Then in Bellshill, sausage-skin maker Devro announced its intention to close its factory with the loss of 90 jobs. The firm said it intends to increase manufacturing at its other North Lanarkshire site in Moodiesburn, which recently received a £2m investment.

In Glasgow, more than 200 people have lost their jobs after retailer Watt Brothers went into administration. Eleven shops were closed and 229 of its 306 employees were made redundant with immediate effect.

Oil services firm Aker Solutions, which has a base at Aberdeen International Business Park, has consolidated its international engineering services and manufacturing work impacting its facility in the city. About 95 jobs are at risk.

Sixty workers at a the BiFab fabrication yard at Arnish in Lewis will not have their contracts renewed. The yard was mothballed for about a year then it was reopened in March of this year to manufacture parts for an offshore wind farm.

BiFab also has yards in Methil and Burntisland in Fife and has previously received help from the Scottish government to avoid the threat of administration. Last month, the Auditor General for Scotland said a taxpayer loan of £37m to BiFab is now valued at £2m.

Cummins which specialises in the distribution of engines and generators for various industries has announced it intends to close its operations in Cumbernauld. The company blamed increasingly challenging global economic conditions and said the facility requires a £3m investment. About 130 jobs are at risk.

A rare bright spot this month was supermarket chain Lidl, which officially opened its new £70m Scottish distribution centre in North Lanarkshire.

The 58,500 sqm warehouse is Lidl’s largest in Great Britain and will service the company’s 99 stores in Scotland. About 600 employees have relocated from Livingston to the Eurocentral-based centre and there is scope for a further 250 new jobs.

Transport

The air link between Dundee City Airport and London Stansted will continue into 2020. The UK and Scottish governments and Dundee City Council have agreed a public service obligation contract.

The service will run 11 flights every week, with the size of the planes on the route increasing from 33 to 48 seats. It is not clear how much public money is involved. The subsidy required for the initial two year period was c£3.7m