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Gross Domestic Product for Scotland 2010 Quarter 2

Description2010 Q2 Scottish GDP results
ISBN
Official Print Publication DateOctober 2010
Website Publication DateOctober 20, 2010

GROSS DOMESTIC PRODUCT (GDP) FOR SCOTLAND FOR THE 2nd QUARTER OF 2010

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

GDP 2010Q2 PDF

Dataset

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

GDP 2010Q2 XLS

Revisions Paper

This publication includes the implementation of methodology developments across all sectors of the economy:

GDP 2010Q2 Methodology Note

20 October 2010

Scottish Gross Domestic Product (GDP) in constant basic prices, also referred to as Gross Value Added (GVA), grew by 1.3 per cent during the second quarter of 2010 and fell by 1.7 per cent over the year, according to provisional estimates released today by Scotland's Chief Statistician.

GDP Growth Rates 2007 -2010 Q2

GDP2010Q2

The main findings of the latest figures are:

· GDP grew by 1.3 per cent during the second quarter of 2010 (seasonally adjusted) and fell by 1.7 per cent over the year to the end of 2010 Q2.

· In the year to end-June 2010, the Scottish services sector fell by 1.2 per cent, the production sector fell by 3.9 per cent, and the construction sector fell by 3.2 per cent.

· In the second quarter of 2010, the services sector grew by 0.3 per cent, the production sector grew by 2.5 per cent and the construction sector grew by 10.4 per cent.

UK Figures:

· The UK figures show that GDP on a comparable basis (constant basic prices) fell by 1.5 per cent in the year to end-June 2010 and grew by 1.2 per cent in the second quarter of 2010.

· Over the year, the UK experienced a 1.0 per cent fall in services, a 3.8 per cent fall in production and a fall of 2.4 per cent in the construction sector.

· In the second quarter of 2010, the UK services sector grew by 0.6 per cent, the production sector grew by 1.0 per cent and the construction sector grew by 9.5 per cent.

Industry Analysis:

· During the second quarter of 2010, service sector output in Scotland grew by 0.3 per cent. Within services, real estate and business services (+1.7%), retail and wholesale (+1.8%) and other services (+0.4%) experienced growth. Output remained unchanged in public administration, education and health (-0.0%), and there were falls in hotels and catering (-1.0%), financial services (-2.1%) and transport, storage and communication (-2.4%).

· Overall output in the production sector grew by 2.5 per cent. Within production there was growth in manufacturing (+2.2%), electricity, gas and water supply (+3.9%) and mining and quarrying (+1.9%).

· Within manufacturing there was growth in engineering and allied industries (+5.6%), metals and metal products (+3.2%), chemicals and man-made fibres (+2.6%), textiles, footwear, leather and clothing (+4.6%) and other manufacturing (+0.3%). There were falls in food, drink and tobacco (-0.1%) and refined petroleum and nuclear fuel processing (-3.0%).

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 and 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 bear this in mind when interpreting all economic indicators.

4. These GVA estimates will move to SIC 2007 when the main UK National Accounts aggregates start to be published on that basis. This quarter's figures are based on SIC 2003 classification with one exception - the repair sector, which is surveyed as part of the main services survey inquiry is now classified included in 'Other Services'. The retail figures published in the Retail Sales Index for Scotland are on a comparable basis with the retail figures in this bulletin .

Major Developments in 2010 Q2

5. This publication includes the implementation of methodology developments across all sectors of the economy. These are:

· the incorporation of weights, and re-indexation of time series, to 2007, reflecting the latest Input-Output tables for 1998-2007 published on 13 October 2010;

· benchmarking of the quarterly GVA time series to the Input-Output data up to 2007;

· the replacement of panel estimation with ratio estimation for production industries;

· the incorporation of an improved measure of health service output.

6. These developments lead to widespread revisions in the historical time series, which are summarised in tables 8-13 and presented in greater detail in the accompanying methodology note published at: http://www.scotland.gov.uk/Topics/Statistics/Browse/Economy/GDP/GDP2010Q2Revisions

7. In this and future publications a series for banking will no longer be published in table 4, and the series for financial services (table 3) will be the lowest level of aggregation published for this sector. This is in line with practice in all UK GDP estimates and national accounts industry classifications. The primary reason for this change is the development of enhanced data sources which require more restrictive data usage agreements.

8. This publication of GDP coincides with the first major publication of official statistics in development from the Scottish National Accounts Project (SNAP). There are a number of new National Accounts measures, including monetary estimates of GDP and GVA, available on an experimental basis at the SNAP website. http://www.scotland.gov.uk/SNAP

Chainlinking

9. 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.

10. The weights used to produce growth rates for Scotland in this publication have been updated to reflect the latest Scottish Input-Output tables published on 13 October 2010, with the latest weights relating to 2007.

11. The Office for National Statistics updated the weights used to compile their aggregate measures, including GVA, in the 2010 Q1 Quarterly National Accounts published on the 12th July 2010. UK data are now calculated using weights relating to 2006.

Seasonal Adjustment

12. 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.

13. The X-12-ARIMA technique is used where appropriate to remove regular 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).

14. Alongside the widespread methodology changes detailed in note 5, a full review of seasonal adjustment modelling has been completed for the results in this publication to ensure that results accurately reflect the latest data.

Methodology developments

15. The Scottish GDP indices are under a continuing program of methodological development which is regularly peer reviewed by the Scottish Economic Statistics Consultants Group (SESCG). Information about SESCG, including papers and minutes from recent meetings, is available on the Scottish Government website at http://www.scotland.gov.uk/Topics/Statistics/Browse/Economy/ScotStat/comms.

Background

16. 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.

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

18. 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

19. 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 2008 were published on 9th December 2009. The ONS current price value estimates are methodologically different from the Scottish Government volume (constant price) index and are based on different data sources.

20. The Scottish National Accounts Project team (see note 8) have developed a number of estimates of cash value GVA and GDP for Scotland.

Revisions

21. 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.

22. 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 2010. 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.

23. There are substantial historical revisions in this publication due to the methodological changes detailed in note 5, most significantly due to benchmarking of GVA data to the 1998-2007 time series of Supply & Use tables in the Scottish Input-Output analysis. The effects of benchmarking are discussed in detail in the methodology paper outlined in note 6.

24. Due to the implementation of benchmarking to 2007 Input-Output data, the next quarterly GDP results published on 20 January 2011 will only include revisions in the short-term indicator from 2008 onwards. Longer term results will be revised when subsequent Input-Output tables enable the benchmarked data to be updated.

25. In the years since 2007, the series most affected by revisions are:

· mining and quarrying, and several manufacturing series, due to the change to ratio estimates and associated updates to seasonal adjustment;

· health and social work, due to the introduction of a cost weighted output measure;

· transport, storage and communications, due to revised source data.

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

National Statistics

27. 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.

28. 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

St Andrew's House

Regent Road

Edinburgh, EH1 3DG

Telephone

Press Office: Stewart Cooper 0131-244-2175

Statistician: Richard Morrison 0131-244-3768