The State of Britain

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%.