Statistics Publication Notice
A Scottish Executive National Statistics Publication
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GROSS DOMESTIC PRODUCT FOR SCOTLAND FOR THE 1 ST QUARTER OF 2004
Gross Domestic Product in Scotland rose by 1.6 per cent over the year to 2004 Q1 and by 0.2 per cent in the first quarter of 2004 according to provisional estimates released today by the Scottish Executive.
The main findings of the latest figures are:
- GDP rose by 1.6 per cent over the year to 2004 Q1 and by 0.2 per cent in the first quarter of 2004 (seasonally adjusted).
- In the year to 2004 quarter 1, annual output in the Scottish service sector grew by 2.0 per cent, compared with a 1.5 per cent drop in the production sector and an 8.0 per cent rise in construction.
- The service and construction sectors were the main drivers of growth in the latest quarter. Over the year, the service sector was the main source of growth.
- The UK figures (now based on 2001 weights and therefore not strictly comparable - see note 4) show that GDP rose by 2.3 per cent over the year to 2004 Q1 and by 0.6 per cent over the latest quarter.
- In the year to 2004 quarter 1, the UK experienced a 2.8 per cent growth in services, a 0.1 per cent drop in production and 6.6 per cent growth in construction.
- Output in the manufacturing sector continued to grow, increasing by 0.8 per cent in 2004 Q1. Over the year, the sector still shows a decline of 1.5 per cent.
- Within manufacturing, the sectors driving the quarterly increase were engineering & allied industries (1.0% over the quarter) and food, drink & tobacco (1.4% over the quarter).
- Over the latest quarter, the service sector grew by 0.1 per cent. Within this sector financial services (3.2%) and retail & wholesale (1.9%) experienced the highest growth over the quarter. In contrast, real estate & business services (-0.6%) and other services (-2.8%) both fell over the quarter.
Table 1: Gross Value Added chained volume measures at basic prices, 1,2 by category of output Scotland, 1998 to 2004 Q1
Total Gross Value Added
Agriculture, Forestry & Fishing
2000 weights 3
Q1 03 on Q4 02
Q2 03 on Q1 03
Q3 03 on Q2 03
Q4 03 on Q3 03
Q1 04 on Q4 03
% change latest 4 qtrs on previous 4 qtrs
1. Gross Value Added (GVA) is also referred to as Gross Domestic Product (GDP) at basic prices
2. Estimates cannot be regarded as accurate to the last digit shown
3. Weights may not sum to the total due to rounding
- Gross Domestic Product (GDP) is a measure of the value of goods and services produced by residents, before allowing for depreciation or capital consumption. Net receipts from interest, profits and dividends abroad are excluded. The estimates produced in this publication measure GDP at basic prices (also referred to as gross value added (GVA)).
- In February 2004 on publication of results for 2003 Q3, the Scottish GDP estimates moved to annually weighted and chained estimates of volume measures - referred to as "annual chainlinking" - as recommended in the System of National Accounts 1993. This is consistent with the UK where this approach was introduced on 30 September 2003 in respect of the 2003 Q2 results. Annual chainlinking is achieved by producing a weighted average of over 260 separate indices (160 of which are in the production sector). The indices represent changes in the value added, at constant prices, in the production of goods and services in individual industries. These industries are compiled using the standard industrial classification SIC2003.
- The main difference between chainlinking and the previous "fixed base" methodology is that the weights applied to each industry (reflecting importance in the Scottish economy) are updated on an annual basis, instead of a 5-yearly basis. The major effect of chainlinking has been to more accurately reflect the changing importance of sectors. The impact of chainlinking the Scottish GDP series to 2000 weights was to reduce the negative effect of the low/declining growth in some sectors, while simultaneously increasing the importance of those which had been performing well. Both of these changes had a positive effect on the overall level of growth estimated by the Scottish GDP series. However, updating weights does not necessarily result in a positive impact on GDP. For example, if prices in an industry fall over time, despite high growth in the volume of output (as measured by the GDP index), the industry's relative value can decrease. This would result in a fall in the weight, and a reduction in the impact of high growth in that industry. A paper on the effects of chainlinking on Scottish GDP providing a more detailed explanation of the new methodology and its effects is available on the Scottish Executive internet site www.scotland.gov.uk/gdp.
- UK figures are included in this release for illustrative purposes but they are not strictly comparable with the Scottish index. The UK index moved to a 2001 base year on publication of the Quarterly National Accounts in June 2004 (which means they are using 2001 weights for the latest quarters instead of 2000 weights). This change has caused (mainly upward) revisions to the UK data from 2001 onwards. The Scottish index will move to a 2001 base year on publication of 2004 Q2 results in October 2004. Until this point, extreme care should be taken when comparing Scottish and UK results as they are not strictly comparable.
- Series are derived from indicators based on data from a wide range of sources. Examples include: deflated turnover, deflated production, the volume of a good or service sold or produced and, for some parts of the public sector, employee numbers.
- The quarterly Scottish GDP estimates are published within 4 months (approximately 17 weeks) of the end of the quarter to which it relates.
- The indices published within this Statistics Publication Notice are grouped according to the 2003 revised Standard Industrial Classification. The four broad groupings of industries are
(a) agriculture, hunting, forestry and fishing(b) production which comprises: mining and quarrying industries; energy and water supply; and manufacturing, which includes: refined petroleum products and nuclear fuel; chemical and man-made fibres; metal and metal products; engineering and allied industries; food, drink and tobacco industries; textiles, footwear, leather and clothing; other manufacturing.
(d) services, which includes: retail and wholesale; hotels and catering; transport, storage and communication; financial services; real estate and business services; public administration, education and health; other services.
- Scottish GDP estimates will generally be less reliable than the estimates for the UK, primarily because the equivalent UK figures are produced by balancing 3 independent sets of estimates (Output (GVA), Income & Expenditure-based approaches). Furthermore, the survey data tend to be based on smaller numbers of units, making figures for Scotland more likely to be subject to small random fluctuations.
- Estimates of the cash value of gross value added (GVA) at current prices for Scotland (and other regions of the UK) are produced by the Office for National Statistics. Estimates for 2002 were published on 30 th April 2004. The ONS current price value estimates are methodologically different from the Scottish Executive volume (constant price) index and are based on different data sources.
- The figures in this Statistics Publication Notice incorporate revisions due to new and revised data, and the updating of seasonal adjustment factors. Where appropriate, the data suppliers have verified these changes. Tables 8 - 13 identify the extent of revisions since the last publication in April 2004. The series most affected by revisions this quarter are:
- National Statistics are produced to high professional standards set out in the National Statistics Code of Practice. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.
- Detailed results for al industries are available to download from the Scottish Executive website www.scotland.gov.uk/gdp.
Issued by Telephone
Office of the Chief Economic Adviser
Office of the Permanent Secretary
St Andrew's House
Edinburgh EH1 3DG
List of Tables
Table 1: Gross Value Added chained volume measures at basic prices, by category of output
Table 2: Gross Value Added chained volume measures at basic prices, by category of output
Table 3: Gross Value Added chained volume measures at basic prices: service industries
Table 4: Gross Value Added chained volume measures at basic prices: detailed service industries
Table 5: Gross Value Added chained volume measures at basic prices: production industries
Table 6: Gross Value Added chained volume measures at basic prices: detailed production industries
Table 7: Gross Value Added chained volume measures at basic prices by category of output
Table 8: Revisions to data published on 28 April 2004 (Table 2)
Table 9: Revisions to data published on 28 April 2004 (Table 3)
Table 10: Revisions to data published on 28 April (Table 4)
Table 11: Revisions to data published on 28 April 2004 (Table 5)
Table 12: Revisions to data published on 11 February 2004 (Table 6)
Table 13: Revisions to data published on 28 April 2004 (Table 7)
NEXT PUBLISHED (Provisionally): 27 th October 2004