ECONOMIC growth in Scotland was twice the rate of that in the UK as a whole in the first quarter, revised official statistics reveal.
Quarterly national accounts data published yesterday show the Scottish economy grew by 0.4 per cent quarter-
on-quarter in the opening three months of this year. This is double the 0.2% first-quarter growth in Scottish gross domestic product estimated in June, when initial figures were published. The UK economy grew by 0.2% in the first quarter.
Comparing the year to March with the preceding 12 months, Scottish GDP was up by 1.3%. This was slightly adrift of a corresponding growth rate of 1.5% for the UK as a whole.
In the previous figures in June, the four-quarter-on-four-quarter growth rate in Scotland had been estimated at just 0.8%. At that stage, UK-wide growth over the same timeframe was put at 1.6%.
Comparing the first quarter with the same period of last year, GDP growth in Scotland was 1.3%, ahead of a corresponding rate of 1.2% UK-wide.
Scottish growth for the 2017 calendar year was also revised up, from 0.8% to 1.3%, in the latest data, although this was still adrift of relatively modest 1.7% expansion in the UK as a whole last year.
The quarter-on-quarter fall in Scottish construction output in the opening three months of this year has been revised to 1.4%, from 3.5% in the previous GDP figures published in June.
Scottish manufacturing output jumped by 2% quarter-on-quarter in the first three months of 2018, the latest figures show. UK manufacturing output fell 0.1% in the first quarter. Services sector output in Scotland rose by 0.4% in the first quarter, ahead of a 0.3% increase in the UK as a whole.
The quarterly national accounts also reveal strong growth in export volumes for manufacturers north of the Border. Scottish manufactured export volumes rose by 3.6% quarter-on-quarter in the opening three months of 2018. Comparing the year to March with the previous 12 months, manufactured export volumes rose 8.7%.
Liz Cameron, chief executive of Scottish Chambers of Commerce, said: “This is great news for Scotland, but concerns remain that the construction industry continues to
experience falls in output, with GDP [growth] also remaining below historical...trends.”
The quarterly national accounts contain major revisions to past construction output, with growth in this sector over 2014 and 2015 now calculated to have been much less dramatic than estimated previously.
Economist John McLaren, who runs the Scottish Trends website, said: “Back in 2016, the estimated growth in the construction sector over 2014 and 2015 was 34% and now it is 6%.”
He added: “The revised figures for Scottish GDP show a better performance of late than had been previously estimated but the post-
recession performance remains poor, in fact overall worse than before.
“The huge revisions to construction output are a worry but at least seem to make more sense than the 34% growth in two years that had been estimated earlier. Such large and late revisions make it difficult to seriously analyse Scottish economic performance.”
Separately, data published yesterday by the Office for National Statistics showed annual UK consumer prices index inflation rose to 2.5% in July, having been at 2.4% in each of the prior three months.
Figures published on Tuesday by the ONS showed average weekly earnings for employees in Great Britain in the April to June period were, in nominal terms, up by just 2.4% on the same period of last year.
The inflation and earnings figures highlight the squeeze on UK household incomes, which is proving a significant drag on economic growth.
Ms Cameron said: “The increase...in the CPI [inflation] rate had been predicted by the Bank of England in [its] latest inflation report, and thus was expected.
“However, the prospect of inflation rising again will bring little comfort to consumers, especially given the slowing wage growth observed in the latest labour market statistics.”
Chris Williamson, chief business economist at IHS Markit, said: “Consumer price inflation ticked higher to 2.5% in July. The rise...goes some way to help vindicate the Bank of England’s recent decision to hike interest rates.
“The data follow news that wage inflation slowed in the three months to June, meaning the cost of living is once again rising at a faster rate than pay.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here