ON THE face of it, the latest Scottish growth performance, for the first three months of this year, does not make very encouraging reading. After almost three years of above-trend rises in output, Scottish GDP rose by just 0.2% between January and March. That is well short of other recent quarterly increases in Scottish output (ranging from 0.4% to 0.9%) and well behind the 0.7% increase recorded in the UK economy as a whole at the start of this year. So Scotland's new finance secretary John Swinney can find some statistical backing for his claim that Scotland's growth "has not been good enough".
ON THE face of it, the latest Scottish growth performance, for the first three months of this year, does not make very encouraging reading. After almost three years of above-trend rises in output, Scottish GDP rose by just 0.2% between January and March. That is well short of other recent quarterly increases in Scottish output (ranging from 0.4% to 0.9%) and well behind the 0.7% increase recorded in the UK economy as a whole at the start of this year. So Scotland's new finance secretary John Swinney can find some statistical backing for his claim that Scotland's growth "has not been good enough".
That said, it is never wise to place too much emphasis on what one quarter's figures appear to be telling us, the more so when such numbers are routinely revised, up and down, as the quarters roll by. This latest reading detects a further sharp decline in activity from the production industries (including manufacturing). In the service sector, retail, real estate and business services output have all dented an otherwise rising trend. While construction, the strongest performer of all in recent times, records its second successive quarterly fall.
But on an annualised basis, the Scottish construction sector is still growing at more than 5% a year, three times the rate in the UK as a whole. And within the dominant services sector, business and financial services as a whole are still growing marginally faster in Scotland than in the UK as a whole. Furthermore, the weakness detected by government statisticians in areas like retailing and real estate seems at odds with other business survey evidence of continued strong consumption on the high street and rising house prices.
Overall, year-on-year, Scottish GDP is still growing at 2.4%, not as fast as the UK's 3%, but well ahead of the historic trend average of 1.8%, now adopted by the SNP as its benchmark measure of Scotland's "underperformance". If one quarter's poor output growth were to turn, in time, into a new trend, Scotland's policymakers would have strong grounds for concern. But it could also turn out to be a quarterly blip, like the one recorded between the final quarter of 2004 and the first quarter of 2005.
Until we know, for sure, that Scottish growth has embarked on a new trajectory, competing politicians, like Mr Swinney and Scotland Office minister David Cairns, for Labour, can trade all the numbers they like to justify their take on Scotland's growth story. For the rest of us it's a trade which promises to generate more confusion than enlightenment.
