This brief analysis of the latest ‘Government Expenditure and Revenues Scotland 2014-15’ publication also includes projections forward of Scotland’s fiscal balance to 2010-21, using Office for Budget Responsibility forecasts.
Download full report here:
Productivity Briefing Note – commissioned by SCDI for use as input to their recent report ”From Fragile to Agile: A Blueprint for Growth & Prosperity’
Productivity, and its rate of growth, is a key measure of economic success. It is best measured in terms of labour productivity per hour.
Within the overall measure, multi-factor productivity (MFP) is a key element as it picks up the role of innovation and new practices in improving output.
Many ‘advanced’ economies have been worried about a slowing in underlying productivity in recent decades. This concern has been exacerbated post 2007 as productivity has fallen or stood still.
Brief Analysis of latest Quarterly National Accounts Scotland (2015 Q3) statistics
The bad news over the Scottish economy continues with the latest publication of Scottish National Accounts figures.
Excluding offshore (North Sea) activity, cash terms Scottish GDP grew in Quarter 3 (+0.6%) after a couple of quarters of falls. However, including (a geographical share of) the offshore sector resulted in a fall (-0.8%) in overall Scottish GDP in Q3.
This latest fall means that Scottish GDP per head of population (including the North Sea) is now 1% lower than that of the UK as a whole. Only two years ago this figure was 6% in Scotland’s favour and in 2008 it was over 15% in Scotland’s favour. (Note: Using GDP per capita gives an exaggerated picture of Scotland’s relative decline, due to ownership issues, and the use of Gross National Income would be a better measure, but is currently not available for Scotland.)
Scotland’s (onshore) Net Trade position in Quarter 3 was -£4.25 billion, the highest deficit on record. Scotland looks to be on course for a deficit of over £15 billion in 2015, well above the previous record annual deficit level seen in 2008, of just under £12 billion, and around £6 billion worse than was seen in 2013.
This rising deficit is due in large part to a deteriorating trade position with regards to the Rest of the UK, which has worsened by £1.5 billion in the last 3 quarters alone, with exports down and imports up, both by around £750 million.
• Recent Scottish GDP growth remains much slower than for the UK. Despite the stellar
performance in Construction over the past 2 years, overall growth in the Scottish economy
(4%) has been less than half that seen for the UK (8.8%) since the previous peak of 2007.
• Within the Scottish total, Construction sector growth remains very fast over the past year,
which can be largely explained by exceptional infrastructure projects (see page 2).
• Relatively slow Private Sector services growth continues to hold back growth, particularly
with respect to Transport & Communications (see page 3).
• Omissions in basic data hamper our understanding of the economy, both in terms of the
recent boom in Constructions real impact on Scottish prosperity (see page 2) and with
respect to the role of Oil & Gas related industries (see page 4).
The Scottish government’s latest Oil and Gas Analytical Bulletin (OGAB) (1) now reflects the lower oil price landscape that has been evident since last Autumn. As a result, scenarios for Scottish North Sea tax revenues (or receipts) have been subjected to substantial downward revisions since the last estimates made in May 2014.