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Latest Scottish economic bulletin published today
29/09/1998
The September 1998 edition of the Scottish Economic Bulletin is released today. The Bulletin provides the usual wide range of data on the Scottish economy and a review of recent economic performance in the Economic Review. There are also three other articles in this edition:
· The Scottish Shipbuilding Industry.
· Labour Market Statistics in Scotland.
· The Housing Market in Scotland.
Economic Review
The Economic Review provides the usual summary of recent trends and short-term forecasts for the UK and Scottish economies.
Output-based GDP for Scotland rose by 2.1 per cent between 1995 and 1996. This is equal to the average annual growth rate in Scotland since the trough in 1981. Scottish GDP, excluding oil and gas, also rose by 2.1 per cent. The nearest equivalent UK figure increased by 2.4 per cent.
The Index of Production and Construction for Scotland (excluding oil and gas) fell by 1.0 per cent over the first quarter of 1998. Output rose slightly in manufacturing (0.1 per cent), but fell in construction (4.3 per cent), electricity, gas and water supply (2.1 per cent) and mining and quarrying (1.3 per cent). The UK Index (excluding oil and gas) rose by 0.1 per cent over the same period.
ILO unemployment (not seasonally adjusted) in Scotland fell by 32,000 in the year to April-June 1998 to 188,000 or 7.6 per cent. Employment in Scotland grew by 19,000 over the same period, which implies a fall in the number of people classed as economically active. Claimant count unemployment (seasonally adjusted) in Scotland fell in every month from February to July 1998, except for May. As at July 1998, the claimant count stood at 137,400 or 5.6 per cent of the workforce.
The independent forecasters expect a deceleration in Scottish GDP growth this year to between 1.5 per cent and 2.1 per cent. A further deceleration in growth is anticipated in 1999. In the two most recent forecasts, some growth is expected in employment in 1998 but employment is projected to decrease next year. A fall in the average claimant count unemployment rate is forecast for this year. However, unemployment is expected to rise in 1999.
The Scottish Shipbuilding Industry
This article is based on a Scottish Office paper distributed to delegates at the Scottish Shipbuilding and Marine Sector Seminar held on 15 September 1998 at the Scottish Engineering Centre, Glasgow. It sets out background information on the shipbuilding industry in Scotland:
· It is estimated that in 1996, the shipbuilding industry employed 10,100 people, accounting for 4 per cent of manufacturing employment in Scotland.
· Total Scottish employment dependent on the shipbuilding industry in 1995 was around 17,000.
· In 1995, gross value added in the shipbuilding industry was £287 million.
· Output in the industry has fallen by 33 per cent over the period 1986-1997, though with some significant fluctuations in output, compared to a 39 per cent increase in manufacturing output over the same period.
· Shipbuilding exports outside Scotland in 1995 accounted for 93 per cent of final industry demand. Exports to the rest of the UK account for 56 per cent of final demand while the proportion of exports to the rest of the world was 37 per cent.
Labour Market Statistics in Scotland
The purpose of this article is to explain and illustrate the changes in the presentation and availability of labour market statistics in Scotland, following the improvements introduced across the UK by the Office for National Statistics (ONS) in April 1998.
New monthly Labour Market Statistics First Releases draw on information from a number of sources, particularly the Labour Force Survey (LFS), to give a more rounded picture of the labour market.
At Scotland level, headline data (seasonally unadjusted) are now provided on employment, internationally comparable unemployment and economic inactivity for the average of the latest three months, in addition to the monthly count (seasonally adjusted) of those claiming unemployment-related benefits.
A wider range of data is available for the seasonal quarters, including a breakdown of employment, labour market participation rates for different age groups, information on working patterns, and further detail on the economically inactive, including the reasons why those who want a job are not looking for work.
ONS are investigating the feasibility of producing both seasonally adjusted LFS data and improving the range of LFS indicators at a local level for Scotland and other areas of the UK.
The Housing Market in Scotland
There are 2.1 million households in Scotland and 2.2 million dwellings. Some 59 per cent of dwellings in Scotland are owner-occupied. This proportion is lower than in England and Ireland but higher than in France, The Netherlands and Germany. However, the period of substantial growth in owner-occupation witnessed in Scotland over the last 20 years now appears to have ended.
Scotland has the largest proportion of housing stock in the hands of public authorities of any UK region/country. But this figure has fallen dramatically over the last 20 years.
House prices in Scotland were flat between 1996 and 1997 but in real terms they have fallen. There is some evidence to suggest that prices are sluggish because house buyers are buying smaller properties than in previous years, perhaps as a response to rising mortgage costs.
The total level of outstanding mortgage balances in Scotland is estimated to be around £30 billion. Some 68,000 new mortgages were taken out in 1997 worth £2.9 billion.
Around 21,500 new houses were built in Scotland in 1997 - approximately 79 per cent of them by the private sector. Over the period 1989-1997, 10 per cent of all private new build houses in Scotland received a direct public sector subsidy. In total, the public sector in its various forms has contributed wholly or partly to 27 per cent of all new houses in Scotland over this period.
Public and private housing investment in Scotland totalled £2.3 billion in 1995 (3.8 per cent of Scottish GDP). This compares to 2.9 per cent of GDP in the UK, 7.5 per cent in Germany, 5.0 per cent in Ireland and 4.5 per cent in France.
The housing market in Scotland (and the rest of the UK) is more exposed to fluctuations in mortgage rates than the rest of Europe, despite the fact that owner-occupation in Scotland is not particularly high by European standards. The level of mortgage debt as a proportion of GDP in Scotland is higher than in most European countries as is the dependence on variable (as opposed to fixed) rate mortgage finance.
BACKGROUND
1. The Scottish Economic Bulletin is published in March and September of each year. The Bulletin was established in 1971 and each edition provides a wide range of data on the Scottish economy and a review of recent economic performance in the Economic Review. In addition, there are generally three or four other articles in each edition. These articles have covered a wide remit in the past and have included authors from within The Scottish Office and outside academics. Editorial responsibility for the Scottish Economic Bulletin lies with the Economics Advice and Statistics Division of The Scottish Office Education and Industry Department. The next edition of the Bulletin (No. 57) will be published in September 1998.
2. The Scottish Economic Bulletin, ISBN 0-11-495902-1, will be available from Stationery Office outlets, priced £13.00 and The Scottish Office Website at www.scotland.gov.uk/frame2lx.htm
News Release: 1941/98
28 September 1998