Economy outlook positive
Growth forecasted but consumer sentiment remains negative following EU Referendum.
The latest State of the Economy report has been published today by Scotland’s Chief Economist Dr Gary Gillespie.
Dr Gillespie’s report sets out the key trends in the Scottish economy in the second half of 2016, and the outlook for the coming year.
The report highlights:
• Forecasts for the Scottish economy remain positive with Scottish Government growth forecasts of 1% and 1.3% in 2016/17 and 2017/18
• The Scottish labour market has remained resilient with the unemployment rate falling over the past year
• Scottish productivity has continued to grow and has now closed the gap with UK levels
• Following the EU referendum growth rates remain below trend
• The outlook for the oil and gas industry may improve through 2017
• Since the EU referendum, the Scottish Government’s Consumer Sentiment Indicator has fallen to its lowest levels since the survey began in 2013.
Cabinet Secretary for the Economy, Jobs and Fair Work, Keith Brown, said:
“Today’s State of the Economy report shows the impact that the EU referendum is having on the Scottish economy.
“Latest data demonstrates that the Scottish economy has continued to grow and the employment level has increased, despite the persistence of challenges facing the oil and gas sector and its supply chain.
“However while our economy is resilient, this report shows that the growth rate is below trend since the referendum and consumer sentiment has fallen. We cannot underestimate the challenges and risks facing Scotland’s economy as a result of the UK’s vote to leave the EU.
“This report makes clear that productivity and population growth are key drivers of prosperity. Latest data has shown that Scotland’s productivity performance grew around four times faster than the UK in 2015, providing further evidence of Scotland’s economic strength.
“Alongside maintaining improvements in productivity we must also remain open to the economic benefits migration brings to the economy.
“We have set out our commitment to protecting Scotland’s interests, including maintaining access to the single market and freedom of movement, which is so essential to our future prosperity.
“We will continue to support the Scottish economy, including by taking forward our £500m Scottish Growth Scheme - targeting high growth, innovative and export-focused SMEs; by supporting our universities and research base; and by investing in our £6 billion infrastructure plan.”
Report now available.
In looking at the contributions to GDP growth in Scotland and the UK since 2007, productivity growth has made a larger contribution to GDP growth in Scotland, while population growth has been the key driver of overall GDP growth in the UK.