State of the Economy: June 2019
Recent developments in the global, UK and Scottish economies, and analysis of the performance of, and outlook for, the Scottish economy.
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Scotland Summary
Scotland’s GDP growth strengthened in Q1 2019.
- Following a slight easing in the pace of growth in the second half of 2018, GDP growth picked up to 0.5% in Q1 2019.
- Growth was broad based across the Service (0.1%), Production (1.8%) and Construction sectors (2.0%).
- The manufacturing sector contributed most strongly to growth, with output increasing 2.6%.
- GDP per person growth strengthened over the quarter to 0.3% (0.9% annually).
Employment rate has risen to record high in Feb-April 2019.
- The unemployment rate fell over the quarter to 3.3%, remaining close to its record low of 3.2% in Q1 2019.
- The employment rate increased to a record high of 75.9%, with 2.7 million people in employment.
- Over the past year, the number of people in employment has increased by 34,000.
- The inactivity rate fell over the quarter to 21.5%, however remained flat over the year.
Labour productivity growth strengthened in 2018.
- Labour productivity grew by 0.5% in Q4 2018 and by 3.8% in 2018 as a whole – its fastest pace of growth since 2010.
- The increase in productivity over the year reflects that GVA grew 1.3% while total hours worked fell by 2.4%.
Business and consumer confidence remain subdued.
- RBS PMI for May reported a fall in business activity over the month. Looking ahead, businesses continue to expect stronger activity over the coming year, however confidence remains weak by historical standards.
- Consumer sentiment in Scotland fell to its lowest level on record in the first quarter of 2019.
- Independent GDP forecasts estimate growth of 0.8% to 1.2% in 2019, picking up to between 0.9% and 1.6% in 2020.
- Forecasts assume a smooth Brexit, while a no deal Brexit risks pushing the Scottish economy into recession.
Contact
Email: OCEABusiness@gov.scot
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