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Statistics Publication Notice: Economy Series- GROSS DOMESTIC PRODUCT FOR SCOTLAND FOR THE 2nd QUARTER OF 2005

DescriptionGDP 2005Q2
ISBN
Official Print Publication Date
Website Publication DateOctober 26, 2005

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26 th October 2005
A Scottish Executive National Statistics Publication
ISBN 0 7559 2796 6 (Web only publication)
This document is also available in pdf format (972k)

Gross Domestic Product in Scotland rose by 2.1 per cent over the year to 2005 Q2 and grew by 0.6 per cent during the second quarter of 2005 according to provisional estimates released today by the Scottish Executive.

The main findings of the latest figures are:

  • GDP rose by 2.1 per cent over the year to 2005 Q2 and grew by 0.6 per cent over the second quarter of 2005 (seasonally adjusted).
  • Over the year to 2005 Q2, annual output in the Scottish service sector grew by 2.9 per cent, compared with a 0.8 per cent decrease in the production sector and a 1.6 per cent rise in construction.
  • In the second quarter of 2005, the service sector grew by 0.7 per cent, the production sector fell by 0.2 per cent and the construction sector rose by 1.6 per cent.

UK Figures:

  • The UK figures show that GDP rose by 2.2 per cent over the year to 2005 Q2 and by 0.5 per cent over the latest quarter.
  • Over the year to 2005 Q2, the UK experienced a 2.8 per cent growth in services, a 0.6 per cent decline in production and 1.9 per cent growth in construction.

Industry Analysis:

  • Over the latest quarter, the service sector grew by 0.7 per cent. Within this sector the real estate and business services (1.1%) sector was the main driver of the quarterly increase, followed by public administration, education & health (0.6%) and other services (2.1%). Financial services (0.8%) and transport, storage & communication (0.6%) also contributed to the growth.
  • Output in the production sector fell by 0.2% in the latest quarter. Over the year, the sector decreased by 0.8%.
  • Within production, the electricity, gas & water supply sector ( -1.5%) was the main driver of the quarterly decrease followed by the manufacturing sector (-0.1%).
  • Within manufacturing the main sectors driving the quarterly decrease were engineering & allied industries (-1.2%) and food, drink & tobacco (-2.0%). Chemicals (-1.0%) also fell over the quarter.

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 27 July 2005 (Table 2)
Table 9: Revisions to data published on 27 July 2005 (Table 3)
Table 10: Revisions to data published on 27 July 2005 (Table 4)
Table 11: Revisions to data published on 27 July 2005 (Table 5)
Table 12: Revisions to data published on 27 July 2005 (Table 6)
Table 13: Revisions to data published on 27 July 2005 (Table 7)

BACKGROUND NOTES

Definitions

  1. 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)).
  2. Chainlinking

  3. 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.
  4. The main difference between chainlinking and the previous "fixed base" methodology is that the weights applied to each industry (reflecting their importance to 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 weights for this publication have been updated to 2002 in line with the annual chainlinking methodology. Examined in isolation, the effect of applying the new weights to the overall GDP index is negligible. There is a slight negative effect on production and construction growth rates in recent quarters and almost no effect upon services with the result of a very slight reduction in overall GDP growth from 2002 onward. An article providing more information about the chainlinking methodology was published in Scottish Economic Statistics 2004 available at www.scotland.gov.uk/stats/ses.
  5. Panel Refresh

  6. A major methodological improvement was carried out this quarter to refresh the panel of companies monitored in the production sector. Most GDP indices in the production sector are generated by monitoring the performance of a panel of companies from quarter to quarter. The companies on the panel are chosen to be representative of the population of all Scottish companies in that sector.
  7. Reassessment of the companies on the panel has been performed on an ongoing basis since the index of production was first published - ordinarily changes would be made when a company had changed its business structure, or come under new ownership but remained active. Over the last year, a comprehensive panel refresh exercise was undertaken to assess whether the panel was providing a consistent level of coverage of the companies in that industry while reducing the level of imputation for missing data.
  8. Background

  9. 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.
  10. The quarterly Scottish GDP estimates are published within 4 months (approximately 17 weeks) of the end of the quarter to which they relate.
  11. 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
  12. (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.

    (c) construction

    (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.

  13. 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.
  14. Cash Estimates of GVA

  15. 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 2003 were published on 22 nd December 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.
  16. Revisions

  17. The figures in this Statistics Publication Notice incorporate revisions to previously published estimates. The degree of revision this quarter is higher than usual due to the updating of industry weights to 2002 and from a number of improvements to methodology and input data.
  18. Tables 8 - 13 identify the extent of revisions since the last publication in July 2005. Note that revisions to the base year ( i.e. 2002) causes revisions to the index to appear elsewhere in the series but actual revisions to GDP growth rates may not exist. Revisions are shown to one decimal place for total GVA and GVA excluding oil & gas and to zero decimal places for all other sectors.

The series most affected by revisions this quarter are:

  • Manufacturing - due to updating of industry weights and the panel refresh;
  • Mining & Quarrying - due to updating of industry weights and the panel refresh;
  • Financial Services - due to revised life insurance data, revised industry weights and input data for the banking sector;
  • Construction - due to updating of industry weights;
  • Transport - due to revised input and deflator data and adjustments to seasonal factors;

A number of other series are affected by revisions to a lesser extent. These are mainly due to revisions to input data and adjustments to seasonal factors. A more detailed analysis of revisions this quarter is available on the Scottish Executive GDP website www.scotland.gov.uk/gdp.

National Statistics

  1. 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.
  2. Detailed results for all industries are available to download from the Scottish Executive website www.scotland.gov.uk/gdp.

Issued by

Office of the Chief Economic Adviser
Office of the Permanent Secretary
St Andrew's House
Regent Road
Edinburgh
EH1 3DG

Telephone

Press Office: Claire Delaney 0131-242-5666
Statistician: Andrew Mortimer 0131-244-3771