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Gross Domestic Product for Scotland, Quarter 4 2007

DescriptionGross Domestic Product 2007Q4
Official Print Publication DateApril 2008
Website Publication DateApril 23, 2008



23 April 2008

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Gross Domestic Product in Scotland rose by 2.2 per cent in the 2007 calendar year and grew by 0.9 per cent in the fourth quarter of 2007 according to provisional estimates released today by the Scottish Government.

The main findings of the latest figures are:
  • GDP rose by 2.2 per cent annually and increased by 0.9 per cent in the fourth quarter of 2007 (seasonally adjusted).
  • In 2007 as a whole, the Scottish service sector grew by 3.4 per cent, the production sector fell by 1.0 per cent and the construction sector fell by 1.7 per cent.
  • In the final quarter of 2007, the service sector grew by 1.3 per cent, the production sector declined by 0.2 per cent and the construction sector fell by 1.0 per cent.
UK Figures:
  • The UK figures show that GDP rose by 2.9 per cent in 2007 and by 0.6 per cent over the final quarter of 2007.
  • In the year to the end of 2007 Q4, the UK experienced 3.7 per cent growth in services, 0.3 per cent growth in production and the construction sector grew by 2.4 per cent.

Industry Analysis:

  • In the fourth quarter of 2007, the service sector in Scotland grew by 1.3 per cent. Within services, banking (+9.3%), real estate & business services (+1.6%) and other services (+5.5%) all experienced substantial growth over the quarter. All other sub-sectors within services experienced growth with the exception of the retail industry which fell marginally by 0.1 per cent.
  • Output in the production sector decreased by 0.2 per cent over the quarter. Within production, the electricity, gas & water supply industry fell by 7.8 per cent over the quarter and, in combination with a fall in mining & quarrying (-4.3%) acted to more than offset the largely positive quarter 4 position seen in the manufacturing industries. Manufacturing grew by 1.5 per cent over the quarter.
  • Within manufacturing, Engineering & allied industries (+2.4%) and food, drink & tobacco (+1.3%) contributed most to the overall growth in manufacturing. Athough the majority of other sub-sectors within manufacturing also showed growth over the quarter, there were declines in output seen in paper, printing & publishing (-1.2%), textiles, footwear, leather & clothing (-1.5%) and transport equipment (-5.4%).



1. Gross Domestic Product (GDP) is a measure of the value added to materials and other inputs in the production of goods and services by resident organisations; 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. 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 300 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.

3. 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 reflect the changing importance of sectors.

Seasonal Adjustment

4. The data used in the production of these quarterly GDP estimates are seasonally adjusted using the X-12-ARIMA technique where appropriate to remove regularly occurring peaks and troughs so that the underlying trends and other features of the data are easier to identify. Further information about the seasonal adjustment of the GDP data can be found in section A3 of Scottish Economic Statistics 2006 ( www.scotland.gov.uk/stats/ses)


5. 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.

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

7. 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:

  • agriculture, hunting, forestry & fishing;
  • production - mining & quarrying industries; energy & water supply; and manufacturing, which includes: refined petroleum products & nuclear fuel; chemicals & man-made fibres; metal & metal products; engineering & allied industries; food, drink & tobacco industries; textiles, footwear, leather & clothing; other manufacturing;
  • construction;
  • services - retail & wholesale; hotels & catering; transport, storage & communication; financial services; real estate & business services; public administration, education & health; other services.

8. 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 random fluctuation.

Cash Estimates of GVA

9. 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 2006 were published on 14th December 2007. The ONS current price value estimates are methodologically different from the Scottish Government volume (constant price) index and are based on different data sources.


10. The figures in this Statistics Publication Notice incorporate revisions to previously published estimates. Tables 8 - 13 identify the extent of revisions since the last publication in January 2008. Revisions are shown to one decimal place for total GVA and GVA excluding oil & gas. Revisions are shown to zero decimal places for all other sectors.

The series most affected by revisions this quarter are:

  • Agriculture, forestry & fishing and real estate and business services - due to long-run revisions to the published statistics used to produce the estimates;
  • Construction - due to the incorporation of revised deflators;
  • Transport & communication - due to revisions to the company level survey responses used in the construction of the estimates
  • Banking - An audit of the data supplied by the Committee of Scottish Clearing Bankers in collaboration with the four Scottish clearing banks has led to some revisions to previously published estimates for 2007 - these revisions particularly affect quarter 3 of 2007.

A number of other series are affected by revisions to a lesser extent. These are mainly due to revisions to input data, deflators and seasonal adjustment factors.

National Statistics

11. 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.

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

Issued by

Office of the Chief Economic Adviser

Corporate Analytical Services

St Andrew's House

Regent Road

Edinburgh, EH1 3DG


Press Office: Tim Jays 0131-244-5122

Statistician: Andrew Mortimer 0131-244-3771