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Gross Domestic Product for Scotland, Quarter 2 2009

DescriptionGross Domestic Product for Scotland, Quarter 2 2009
ISBN
Official Print Publication Date
Website Publication DateOctober 21, 2009

GROSS DOMESTIC PRODUCT (GDP) FOR SCOTLAND FOR THE 2nd QUARTER OF 2009

For a Portable Document Format (.pdf) version of the results, use the following link: NS logo

GDP 2009Q2 PDF

Dataset

To download the tables in Excel format, use the following link:

GDP 2009Q2 XLS

21 October 2009

A NATIONAL STATISTICS PUBLICATION FOR SCOTLAND

Gross Domestic Product (GDP) in constant basic prices, also referred to as Gross Value Added (GVA), in Scotland fell by 3.2 per cent over the year to the end of 2009 Q2 and fell by 0.8 per cent in the second quarter of 2009, according to provisional estimates released today by Scotland's Chief Statistician.

GDP Growth Rates 2004-2009 Q2

spnchart2009q2

The main findings of the latest figures are:

  • GDP fell by 3.2 per cent annually and fell by 0.8 per cent in the second quarter of 2009 (seasonally adjusted).
  • In the year to end-June 2009, the Scottish service sector fell by 2.5 per cent, the production sector fell by 5.7 per cent and the construction sector fell by 6.3 per cent.
  • In the second quarter of 2009, the service sector fell by 0.4 per cent, the production sector declined by 1.9 per cent and the construction sector fell by 2.8 per cent.

UK Figures:
  • The UK figures show that GDP on a comparable basis (constant basic prices) fell by 3.2 per cent in the year to end-June 2009 and fell 0.6 per cent in the second quarter of 2009.
  • Over the year, the UK experienced a 1.9 per cent fall in services, a 8.8 per cent fall in production and the construction sector fell by 8.2 per cent.
  • In the second quarter of 2009, the UK service sector fell by 0.6 per cent, the production sector declined by 0.5 per cent and the construction sector declined by 0.8 per cent.

Industry Analysis:
  • In the second quarter of 2009, service sector output in Scotland fell by 0.4 per cent. Within services, transport, storage & communication (-1.4%), financial services (-1.0%), other services (-1.2%) and retail & wholesale (-0.4%) all declined over the quarter. The public administration, education & health sector grew by 0.2 per cent along with modest growth in real estate & business services (+0.2%).
  • Output in the production sector fell by 1.9 per cent in the latest quarter. Within production, electricity, gas & water supply (-11.0%) and manufacturing (-0.3%) experienced falls in the latest quarter, but mining and quarrying (+2.5%) grew over the period. Within manufacturing, metals & metal products (-8.5%), chemicals & man-made fibres (-4.2%) and total other manufacturing (-0.2%) fell over the latest quarter. Food, drink & tobacco (+2.3%), engineering & allied industries (+1.6%) and textiles, footwear, leather & clothing (+2.2%) grew over the period.

BACKGROUND NOTES

Definitions and Methodology

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. Scottish GVA estimates will generally be less reliable than the equivalent estimates for the UK, primarily because the UK figures are produced by balancing three independent sets of estimates (Output (GVA), Income & Expenditure-based approaches).

3. Furthermore, the survey data for Scotland tend to be based on smaller numbers of units, making figures for Scotland more likely to be susceptible to statistical variance. Statistical variance in estimates is directly proportional to the variability in the underlying population of interest. In the current economic climate, the variability in the economy is increased and users should bare this in mind when interpreting all economic indicators.

4. The Scottish National Accounts Project (SNAP) is exploring the feasibility of producing income and expenditure measures of GDP for Scotland. Further information is available using http://www.scotland.gov.uk/SNAP

Chainlinking

5. Annual chainlinking is the technique used to compile the overall measure of GVA 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.

6. The Office for National Statistics updated the weights used to compile their aggregate measures, including GVA, in the 2009 Q1 Quarterly National Accounts published on the 30th June 2009. The latest weights used to produce growth rates for Scotland in this publication continue to relate to the year 2004 whilst the weights used in the UK statistics relate to the calendar year 2005. The Scottish weights will be updated following the next publication of Input-Output tables for Scotland.


Seasonal Adjustment

7. The data used in the production of these quarterly GDP estimates are seasonally adjusted in accordance with the European System of Accounts guidelines and international practice.

8. The X-12-ARIMA technique is used where appropriate to remove seasonal 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).

Future developments

9. Following discussion with SESCG in May 2009, the methodology and source data used to compile the Financial Services sector indices is being reviewed.

10. The recent development work carried out by the Information Services Division of the NHS Scotland and analysts in the Scottish Government's Health division towards establishing a direct measure of health service output is nearly complete. It is planned to incorporate these measures when the series are reweighted.

11. Ratio estimation methodology for the Index of Production was discussed at the SESCG meeting on 29 October 2008. It was agreed that this should be incorporated as an improvement to the current use of a panel estimate. This methodology is currently in development and it is planned to introduce it when the series are reweighted.

Background

12. 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.

13. The quarterly Scottish GDP estimates are published within 4 months (approximately 16 weeks) of the end of the quarter to which they relate.

14. 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.


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 2007 were published on 12th December 2008. The ONS current price value estimates are methodologically different from the Scottish Government volume (constant price) index and are based on different data sources.

Revisions

16. Very few statistical revisions arise as a result of 'errors' in the popular sense of the word. All estimates, by definition, are subject to statistical 'error' but in this context the word refers to the uncertainty inherent in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques, or the incorporation of new information which allows the statistical error of previous estimates to be reduced. Only rarely are there avoidable 'errors' such as human or system failures, and such mistakes are made quite clear when they do occur.

17. The figures in this Statistics Publication Notice incorporate revisions to previously published estimates and include the effects of recent ONS revisions to UK GVA series and the underlying source data. Tables 8 - 13 identify the extent of revisions since the last publication in July 2009. 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 an improvement in seasonal adjustment methodology;
  • Retail - due to revisions to deflators;
  • Transport Equipment - The input series for shipbuilding has been replaced with a deflated turnover series using an improved methodology, ratio estimation, that will be more sensitive to current activity.

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

18. 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.

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