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%.

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