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Gross Domestic Product for Scotland, Quarter 2 2008

DescriptionGross Domestic Product, Quarter 2, 2008
Official Print Publication DateOctober 2008
Website Publication DateOctober 22, 2008


22 October 2008

Gross Domestic Product in Scotland rose by 1.8 per cent over the year to the end of 2008 Q2 and grew by 0.1 per cent in the second quarter of 2008 according to provisional estimates released today by Scotland's Chief Statistician.

The main findings of the latest figures are:

  • GDP rose by 1.8 per cent annually and increased by 0.1 per cent in the second quarter of 2008 (seasonally adjusted).
  • In the year to end-June 2008, the Scottish service sector grew by 3.0 per cent, the production sector fell by 0.8 per cent and the construction sector fell by 3.7 per cent.
  • In the second quarter of 2008, the service sector grew by 0.1 per cent, the production sector grew by 0.2 per cent and the construction sector fell by 0.4 per cent.

UK Figures:

  • The UK figures show that GDP rose by 2.5 per cent in the year to end-June 2008 and growth was flat in the second quarter of 2008.
  • Over the year, the UK experienced 3.1 per cent growth in services, 0.2 per cent growth in production and the construction sector grew by 2.8 per cent.
  • In the second quarter of 2008, the UK service sector grew by 0.2 per cent, the production sector declined by 0.7 per cent and the construction sector declined by 0.5 per cent.

Industry Analysis:

  • In the second quarter of 2008, the service sector in Scotland grew by 0.1 per cent. Within services, retail & wholesale (+1.7%), other services (+1.0%) and transport, storage and communication (+2.6%) all experienced growth over the quarter. Following a sharp fall in the first quarter of 2008, the Scottish financial services industry has experienced another smaller fall (-1.0%) in the second quarter of 2008. Real estate & business services fell by 1.0 per cent over the quarter along with modest falls being seen in public administration, education & health (-0.1%) and hotels & catering (-1.0%).
  • Output in the production sector increased by 0.2 per cent in the latest quarter. Within production, manufacturing grew by 0.7 per cent over the quarter whilst mining and quarrying (-1.6%) and the electricity, gas & water supply industry (-2.5%) fell over the quarter. Within manufacturing, chemicals & man-made fibres (+1.4%) grew and food, drink & tobacco (-1.5%) fell over the quarter. Engineering & allied industries grew by 1.9 per cent over the quarter, with growth of 1.5 per cent in mechanical engineering, 0.8 per cent in electrical & instrument engineering and 3.9 per cent in transport equipment. Metals and metal products grew by 2.5 per cent in the latest quarter along with other manufacturing (+0.9%) and textiles, footwear, leather & clothing (+1.8%).



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. Annual chainlinking is the technique used to compile the overall measure of GDP growth and also the other, lower-level published aggregates. The resultant 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. In recent years, it has become the norm for the weights - used to produce the aggregate measures - to be updated each year in the quarter two publication. The Office for National Statistics delayed this process for the UK GDP statistics until their new National Accounts system is fully operational. The latest weights used to produce growth rates for Scotland in this publication continue to relate to the year 2004. We shall amend the weights in the future to coincide with the UK.

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:

(a) agriculture, hunting, forestry & fishing;

(b) 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;

(c) construction;

(d) 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 July 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:

• Other services - due to revisions to company level data for a small number of companies and receipt of revised data from the Office for National Statistics;
• Real Estate and Business Services - due to receipt of revised data for real estate activities and some revisions to company-level data within business services;
• Electricity gas and water supply - due to revisions to seasonal adjustment factors.

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